Market Insider

Why the Fed will no longer be the big deal when it meets

Janet Yellen, chair of the U.S. Federal Reserve
Andrew Harrer | Bloomberg | Getty Images

Like kids waiting for Santa, the one day markets have been thinking about all year is finally here.

The Federal Reserve Open Market Committee on Wednesday is expected to announce an interest rate hike — its second in a year. It's also the second in 10 years, for that matter. However, the 25 basis point increase in the Fed funds target rate has become somewhat anticlimactic, not just because it's been so long anticipated but because there's a new game in town for investors.

"The surprise of the Republican sweep of Congress along with the Trump administration has really changed consensus expectations almost 180 degrees. We really are focusing in on some of the impacts that some of the policy changes could have. We may be shaking up the economic world in terms of what we've been waiting for, what the Fed has even been saying — we need Congress and fiscal policy to do some of the heavy lifting here. I guess in some cases the Fed isn't really leading the story as much as they had in the past, and in some ways the Fed is really following the market right now in terms of raising rates," said Scott Anderson, Chief Economist for Bank of the West.