# Fed surprises with three rate hikes next year — and could need more

> On December 14, 2016 the Fed raised its target rate by a quarter point to 0.50-0.75 percent and projected three hikes in 2017 instead of two. The 2-year Treasury yield reached a seven-year high and the dollar index jumped 1.2 percent to 102.24.

- Date: 2016-12-14 · published 2016-12-14T12:00:00.000Z
- Category: macro · region US · magnitude medium
- Page: https://feedsoft.ai/events/6464-fed-surprises-with-three-rate-hikes-next-year-and-could-need-more
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md), [Corn](https://feedsoft.ai/c/CORN.md), [Soybeans](https://feedsoft.ai/c/SOY.md)

## Why it matters

A hawkish Fed surprise lifts the dollar and yields, which weighs on dollar-denominated feed commodity prices and emerging-market demand.

## Read by commodity

- DXY: bullish ▲
- SOY: bearish ▼
- CORN: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| DXY | 2016-12-15 | 1 | +1.8% | 5.0 | The hawkish Fed surprise pushed Treasury yields to multi-year highs and the dollar index up 1.2%, directly driving the broad dollar move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2016-12-16 | [Dollar near 14-year highs after Fed tips more rate hikes](https://feedsoft.ai/events/6461-dollar-near-14-year-highs-after-fed-tips-more-rate-hikes.md) | +0.0% | -1.3% |
| DXY | 2018-09-27 | [Fed raises rates for 3rd time this year with 1 more expected \| AP News](https://feedsoft.ai/events/62954-fed-raises-rates-for-3rd-time-this-year-with-1-more-expected-ap-news.md) | +0.4% | +1.6% |
| DXY | 2023-07-01 | [Oil drops 1.5% as Fed projects more rate hikes this year](https://feedsoft.ai/events/35655-oil-drops-1-5-as-fed-projects-more-rate-hikes-this-year.md) | -0.3% | -1.3% |
| DXY | 2017-06-16 | [US Fed indicates more rate hikes this year; what this means for Indian rupee](https://feedsoft.ai/events/70794-us-fed-indicates-more-rate-hikes-this-year-what-this-means-for-indian-rupee.md) | +0.3% | -1.7% |
| DXY | 2017-03-15 | [Fed raises rate and sees more hikes as US economy improves - Chicago Sun-Times](https://feedsoft.ai/events/71927-fed-raises-rate-and-sees-more-hikes-as-us-economy-improves-chicago-sun-times.md) | -1.5% | -1.3% |
| CORN | 2016-12-16 | [Dollar near 14-year highs after Fed tips more rate hikes](https://feedsoft.ai/events/6461-dollar-near-14-year-highs-after-fed-tips-more-rate-hikes.md) | -3.0% | -0.2% |
| CORN | 2018-03-21 | [Fed hikes rates and raises GDP forecast again](https://feedsoft.ai/events/65902-fed-hikes-rates-and-raises-gdp-forecast-again.md) | -0.0% | +4.4% |
| CORN | 2018-06-13 | [Fed raises key rate and sees possible acceleration in hikes \| AP News](https://feedsoft.ai/events/64439-fed-raises-key-rate-and-sees-possible-acceleration-in-hikes-ap-news.md) | -4.1% | -8.2% |

## Sources

- cnbc.com: https://www.cnbc.com/2016/12/14/fed-surprises-with-three-rate-hikes-next-year--and-could-need-more.html

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.