Rising Markets Seem to See the Fed Easing. It’s Too Early for That.

What everybody knows isn’t worth knowing, according to market wisdom.

The Federal Reserve will raise its key federal-funds target rate by 75 basis points this coming week, as we all know, from the current 3% to 3.25% range. That hike would be the fourth consecutive one of that size, putting the U.S. central bank on its steepest rate-increase path since the early 1980s. The Fed’s median expectation now is for a 4.40% policy rate by the end of the year, up from near zero at the beginning. (A basis point is 1/100th of a percentage point.)