After 8 years of partying, the markets got news this last week that the party can continue.

At the end of last year, the Federal Reserve Board (FRB) projected that they would likely raise rates 3 – 4 times in 2017. Two hikes have already come and their meeting this past week was much anticipated. The next hike was not expected this go around, however, guidance on when the next hike should be expected was hoped for.

Rather than getting guidance on the next hike, we got the message that concerns over weak inflation may delay further hikes. Rather their focus seems to have shifted to their bloated balance sheet of $4.5T and bringing that down. The expectation is that they will now allow bonds to mature without purchasing new ones. This would give their balance sheet slow relief.

So, while the FRB is not closing the bar down, they have definitely turned up the lights to let us know the party needs to end soon.

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