The Federal Reserve, as expected, raised short-term interest rates and maintained the view that there would be at least one more boost this year and three or perhaps four next year. The overnight rate (called fed funds) is now 1.75-2.0 percent. By the end of next year, it will be 3.5-4.0 percent. Fed chief Powell made it clear that if economic growth accelerates to the point where inflation becomes a problem even more rate hikes will be needed. Of course, but so far there is no sign of that.

The economic data are excellent and improving, but certainly not a cause for concerns about overheating. That might explain why the ten-year yield declined to 2.90 percent from 3.02 and utility stocks rose after the hike and press conference. Maybe investors just don't believe the Fed. Or they might believe that economic growth is peaking now and will subside over a few years and lessen demand for credit. I believe the former. Investors were right not to believe Ben Bernanke or Janet Yellen. They are still skeptical.

The Atlanta Fed, which is the best-known forecaster, now expects second-quarter growth to be 5.4 percent. They credit the tax cuts, strong consumer spending and a terrific employment picture that shows real incomes rising for the first time in nearly two decades and minority unemployment at a record low. The Labor Department said the number of job openings now exceeds the number of job seekers. Who would have imagined that?  

The data and growing level of optimism (a 34-year high among small businesses) is overwhelming valid concerns about the trade and budget deficits, inflation, populism in Europe, slowing economies overseas and rising short-term interest rates. But as always growth trumps all else. It should. When the economic pie is growing people are more secure in their jobs (or find better-paying ones), make more money and are eager to spend it. Household net worth rises, too, now to a record above $100 trillion. Standards of living rise.

Connect the dots. A growing economy, record profits, rising business and consumer confidence, very low unemployment, historically low-interest rates and few alternatives to stocks for investors seeking growth. Hmmm. While things are not perfect, we have an ideal environment for a bull market in stocks. Bottom line: allow for volatility and short-term swings, but stocks are going higher.