The first snowfall hitting New York City this weekend served as a nice reminder that the holiday season is upon us. It snowed in the nation’s capital as well, but that didn’t stop the Federal Reserve (Fed) from reigning in the cheer, as the FOMC raised the Fed Funds target another quarter-point, to a range of 1.25%–1.50%. This was the third hike of 2017, and the policy makers have now raised rates by a full one percent since November of last year.

Was this latest increase an example of Grinch- or Scrooge-like behavior? Probably not. The Fed had done a very good job of telegraphing this move to the markets, so it was not a negative surprise. Some market participants will no doubt feel there was no urgency for another hike, as inflation and attendant expectations remain very well anchored. Indeed, the FOMC is still witnessing inflation readings below their 2% threshold, as measured by their preferred gauge (Personal Consumption Expenditures Price Indexes), and wage gains continue to be muted as well. To provide perspective, in last week’s jobs report, the year-over-year gain in average hourly earnings came in at +2.5% in November, or .4 percentage points below the year-end 2016 reading of +2.9%.

In our opinion, even with this latest increase, U.S. monetary policy is still not restrictive. When you factor in the loose policy settings in both Japan and the eurozone, monetary conditions on a global scale remain rather accommodative. It would appear as if the Fed is continuing on its mission of moving the Fed Funds target further away from zero while it still has the chance. Under chair Janet Yellen, the policy makers have emphasized how Fed Funds are the preferred tool to make adjustments, so any distance that can be provided between zero and the upper band of the overnight money target serves as a potential cushion if the voting members need to reverse course and lower rates in the future.