Fed: Yellen Sticks to the Plan – Investec
Research Team at Investec, suggests that the major event of the last 24 hours was Fed Chair Janet Yellen speaking for the last time ahead of next week's June FOMC policy meeting.
“After last week's soft Non-Farm Payroll report, swap markets were pricing under 10% chance of a 15 June Fed rate rise just one week before the UK vote on EU membership. Last night the Fed Chair said that she still expects gradual rate increases; that positives outweigh the negatives; that one should not place too much weight on one month of payroll data and that labour market slack has been almost eliminated; and that wage growth may finally be picking up. That said, Dr Yellen did not put a timeframe on any potential moves and notably did not use the phrase ‘in the coming months’, in contrast with 10 days ago. It now seems June is unlikely to see any Fed action but July is still on the table.”