Read the Wall Street Journal (WSJ) Jun 2017 Article Fed Raises Rates, Sets Out Plan to Shrink Asset Holdings Beginning This Year (Article attached below) and discuss the following. Do your own research if necessary.

(a) What steps did the Fed announce on Wednesday?

(b) How did stock markets react to the announcement? How would you explain this reaction?

(c) Why are these steps by the Fed needed?

(d) Why do you think IPOs have jumped to $21.8 billion of deals so far this year from $7.2 billion last year?

CENTRAL BANKS Fed Raises Rates, Sets Out Plan to Shrink Asset Holdings Beginning This Year Central bank pencils in one more rate increase later this year if the economy performs as expected By Nick Timiraos Updated June 14, 2017 9:20 p.m. ET WASHINGTON-The Federal Reserve said it would raise short-term interest rates and spelled out in greater detail its plans to start slowly shrinking its $4.5 trillion portfolio of bonds and other assets this year The moves on Wednesday mark the latest test of the economy's ability to grow on its own as the central bank dials back the unprecedented stimulus measures it unleashed through successive bursts of bond purchases after the 200s financial crisis. "The economy is doing very well, is showing resilience," said Fed Chairwoman Janet Yellen at a news conference following the Fed's two-day policy meeting. The Fed said it would increase its benchmark federal-funds rate on Thursday by a quarter percentage point to a range between 1% and 1.25% and penciled in one more increase later this year if the economy performs in line with its forecast Together with the decision to raise interest rates, the balance-sheet plans show confidence in the economic expansion, which has been unspectacular but is also the third-longest on record "We should want the Fed to raise rates because it signals something good about the underlying economy," said Tobias Levkovich. chief U.S. MORE Full Coverage: Federal Reserve Lifts Interest Rates Fed Unveils Plans to Shrink Its Balance Sheet . Central Bank Still Eyes One More 2017 Rate Increase Heard: Isn't That Awkward? The Fed Moves One way. Inflaton Another equity strategist at Citigroup "When it gets overheated and the Fed has to cut if off, that's when you get worried." .Fed's Dot Plot at Odds With Trader Views See Markets React to the Fed in 7 Charts what Economists Say About the Fed's June Rate Decision Parsing the Fed: How the June Statement Changed From May . Video: 3 Things to Know Markets were little changed after the widely expected moves. The Dow Jones Industrial Average rose 46.09 points, or 0.2%, to a fresh high of 21374.56. The S&P 500 fell 2.43 points, or 0.1%, to 2437.92 Wednesday's decisions mark a new chapter for the Fed and Ms. Yellen, whose tenure has been defined by meticulous plans to slowly drain reservoirs of stimulus that she and other Fed leaders forcefully advocated in response to the financial crisis that deepened the 2007-09 recession https://www.wsj.com/articles/fed-raises-rates-sets-out-plan-to-shrink-asset-holdings-beginning-this-year