Much as I expected (given the progression of the data) the Fed hiked again in its December meeting [and in the background continues to wind down its balance sheet by reducing principal reinvestment at a progressive pace... i.e. passive Quantitative Tightening or QT].  Not much major changed in the statement and you can take the SEP with a grain of salt.  As for how the data is progressing, unemployment has been below NAIRU for 18 months, the business and consumer surveys show a tight labor market, and across developed economies, spare capacity is a term for a bygone stage of the cycle. 

So, on the employment side of the Fed's mandate, they are on track.  For now, they are also on track with the inflation aspect too, but that could change very quickly in 2018 as inflation will surely start to come through given tightening capacity and still solid macro data.

That brings into mind 2 key issues: i. how many times does the Fed hike in 2018 (and beyond)? and ii. When do investors start to get interested in cash?  I've put some surveys up on Twitter to gauge the consensus around these issues (much of my followers are traders/investors). So it will be interesting to see the final results.  My view is the Fed will likely end up either hiking much more, or much less than the supposed 3x (7bps).  But it's an open question as to at what level investors start to think that cash looks pretty good as a safe interesting earning asset...

The Fed hiked interest rates another 25bps bringing total hikes to 125bps (5 hikes) with the upper end of the fed funds target rate now at 1.5% -- no more ZIRP here folks!