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Rate Outlook Intact as Fed Becomes More Cautious

The Fed is giving a nod to some of the uncertainty regarding the economy and the effects of future hikes and is leaving the door open to slow down future rate increases.

The Fed met expectations Wednesday by raising its target rate range, now 2.25% to 2.5%. But markets were still roiled as investors fretted about economic growth and how dovish the central bank is really going to be next year.

Overall, Morningstar's long-term rate projection remains intact, where we expect a normalized policy rate of roughly 2.75% to be reached in the next couple of years.