Federal Reserve Chair Janet Yellen said the primary reason for raising interest rates in March was a simple one: the central bank is confident in a steadily improving economy.

Here's the rub. The economy hasn't really been improving lately, it's actually been deteriorating somewhat. Despite record-setting rallies in stocks and renewed optimism among business leaders, hard data mostly point to a still-subdued environment for both investment and consumer spending.

US economic growth "accelerated July to September only to slow back down in line with trend growth in the final months of the year. More importantly, the slowdown in activity is expected to continue with Q1 GDP poised to be just 1%, according to the latest release of the GDPNow model from the Atlanta Federal Reserve," said Lindsey Piegza, chief economist at Stifel, Nicolaus & Company. 

Federal Reserve Bank of Atlanta

So while the Fed has promised to raise interest rates a few more times this year — some say two more, others three — the reasoning for such an increase may be unraveling a bit. 

"A moderate rise in inflation at the start of the year was more than enough justification for a March rate hike," said Piegza. "However, going forward, a continued lackluster growth profile will make it increasingly difficult to suggest additional rate hikes are warranted, particularly if energy prices stabilize in the coming months, removing the upward support to headline price measures."

What about the notion that a fiscal stimulus from the administration of President Donald Trump could boost growth unexpectedly and thereby force the Fed to tighten policy more quickly than expected? 

This seems unlikely anytime soon, especially since the failure of Trumpcare appears to have derailed the Republican agenda for the moment, delaying any possible action on the fiscal front probably at least until next year.