We received some interesting feedback on our FOMC choices. Sources tell us the "higher ups" on the Committee are skeptical of actions less than 25bps. The panel doesn't believe smaller moves can/will make proper condition changes in the economy.
This begs the question : Then why raise rates at all? We were laying out a possible path to normalization. If the concern of the FOMC is slowing credit and thus economic activity, then raising rates is a moot point. We believe our method would increase confidence and facilitate credit by signaling the end of ZIRP on a "principles" basis. The source information also means the first move will be even more attenuated.