The Fed’s long awaited rate increase and subsequent statements in December seemed to set the stage for 2016: Continued economic growth, inflation picking up towards their 2% goal, rising wages, and four rate increases in 2016. However; major volatility in global financial markets with stock indexes suffering major losses has changed the outlook. The Fed today in their January meeting left rates unchanged and also seems unlikely to raise rates at the March meeting, throwing the ‘four raise’ scenario very unlikely. The futures market is pricing in one raise for 2016. The macro question is whether renewed growth expectations based upon the ‘old normal’ of pre-great recession metrics are outdated. Perhaps the next several years will see muted growth. For the first time since 2003, the Fed actually did not offer an assessment about risks to the economic outlook, further indicating how they are ‘caught off guard’ by this month’s events. The 10 year Treasury is at 2.01% on a flight to quality…. stay tuned… David R. Pascale, Jr.