Federal Reserve Policy: The consensus is now looking for five .25% rate increases this year, which would put the Fed Funds rate at around 1.37%. The Fed has also expressed letting their balance sheet to begin rolling off. If rates actually go to 1.37%, we will need the economy to stay strong, or the yield curve will flatten or perhaps even invert. The Fed has also communicated that they will let the balance sheet to start to shrink after a couple of interest rate increases.