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Market tumult may upend Fed's plans for more hikes

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U.S. Federal Reserve Chair Janet Yellen answers a reporter's question during a news conference to announce higher interest rates in Washington on Dec. 16.   © Reuters

WASHINGTON -- With the U.S. interest rate hike partly to blame for the recent market turmoil, the Federal Reserve may have to rethink its assumptions for further hikes this year and next.

     The Fed ended its near-zero rate policy in mid-December on signs of an American economic recovery. Recent data, including better-than-expected jobs numbers that month, underscores the solidity of the economy. New-auto sales marked a record in 2015. Home prices have been on the rise in major cities, including New York. And unemployment has dropped to the pre-Lehman-shock level of 5%, while average hourly wages have climbed 2.5% on the year. Consumer spending has been in an uptrend as well.

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