Doubting the Federal Reserve's ability to hike rates as forecast, markets are wrestling with the central bank over whether the economy reflects a glass half empty or half full.
The Fed hiked interest rates Wednesday by a quarter point and spelled out how it hopes to begin winding down its balance sheet this year. The Fed acknowledged low levels of inflation in the near term but expects inflation to stabilize in the medium term. The Fed also stuck to its forecast for three interest rate hikes this year, and it raised 2017 GDP to 2.2 percent from 2.1 percent.
Krishna Memani, chief investment officer of OppenheimerFunds, said the Fed was unnecessarily "hawkish" in its statement and in its plan to move forward with the balance sheet reduction, which the market sees as the equivalent of a rate hike.
Stocks waffled after the Fed's 2 p.m. announcement and were trading at lower levels, as Federal Reserve Chairwoman Janet Yellen held a briefing after the decision.
"What the markets are doing is basically ignoring the Fed, whatever they say. They are basically going off the data and they know eventually the Fed will get around to being sensitive of the data, that will be the driver," said Memani.