The Federal Reserve's decision to raise interest rates by 25 basis points this week didn't come as much of a shock. Chairwoman Janet Yellen strongly indicated before the meeting that the hike would occur, based on promising employment numbers and building trends in inflation.
But, there's been talk of a more aggressive plan, with the potential for three to four rate hikes this year.
This would be a fairly substantial shift from the cautious Fed that has maintained a low interest rate environment for nearly a decade. And that approach could derail the gains we've made so far.
Since the financial crisis, the Federal Reserve has taken a data-driven approach to interest rate policy and has reacted appropriately to fluctuations in the economy and around the globe. Currently, business and consumer optimism in the U.S. is high, and data indicates that we are in a relatively strong position and on the right trajectory for economic growth.
While things look good domestically and certain risk levels across the globe, such as in Europe and China, are decreasing, the overall state of the global economy is still relatively uncertain. If a major economic or political event occurs abroad, capital will pour into the U.S. and drive interest rates lower.