What To Expect From FOMC Minutes? Market predictions and reactions - page 3
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Fed lift off in September says Reuters poll
Latest Reuters poll has most economists fixed on September
Whether you believe the economists or not it's the sentiment that we need to focus on. If these guys are favouring September then the prices will reflect that too. For the FOMC this week, only 2 out of 70 polled see a hike
Janet Yellen's Prediction Last Month Is Already Being Vindicated
The Fed will take a pass at this meeting and leave market participants debating whether the first rate hike will come in September or December
The Federal Open Market Committee meets this week to discuss the path of monetary policy.
Any possibility of a rate hike at the meeting’s conclusion on Wednesday was already crushed under the weight of weak data early in the year. To be sure, the data support the transitory nature of the weakness, justifying Federal Reserve Chair Janet Yellen’s optimism last month, but it remains too little, too late. Instead, turn to September as the next opportunity for the first rate hike of this cycle.
Yellen established her view on the first-quarter data in a May speech:
If confirmed by further estimates, my guess is that this apparent slowdown was largely the result of a variety of transitory factors that occurred at the same time, including the unusually cold and snowy winter and the labor disputes at ports on the West Coast, both of which likely disrupted some economic activity. And some of this apparent weakness may just be statistical noise. I therefore expect the economic data to strengthen.
Recent data suggest Yellen was correct to trust her instincts. Job growth remains steady, with solid reports for both April and May and even tantalizing hints that wage growth is accelerating:
Continued high levels of job openings in the Job Openings and Labor Turnover Survey (Jolts) bolster the case for stronger wage pressures in the months ahead. Although housing activity remains below prerecession levels, the sector clearly has upward momentum. Inventory for existing homes remains low, prices continue to rise, and the long-beleaguered single-family market is recovering:
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PIMCO FOMC preview: Big news will be if & how Yellen refines her language to indicate
Comments from PIMCO's Richard Clarida, a managing director in the New York office and PIMCO's global strategic advisor on the FOMC.He says there will be no change in policy at this meeting
At the press conference Yellen will offer her perspective on the timing and pace of normalization
So the big news, if any, on Wednesday will be if and how Yellen refines her language to indicate when "later this year" is likely to happen - September or December?
PIMCO sees higher odds of a September hike than the markets do
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FOMC Press Conference: Yellen Explains Why Everything Will Be Awesome In The Future
Upgradesto labor market (despite downgradesto economic growth), upgradesto rate hike expectations (despite IMF warnings and downgradesto economic growth) and upgradesto being beyond the law (despite Congressional lambasting)... But do not be confused, Yellen will explain how it all makes sense (and if she can't will mumble and curse and move on)...
We are waiting for The Congressional Leak Probe question...
"*YELLEN: WAITING TOO LONG TO RAISE RISKS OVERSHOOTING INFLATION"That is cynical - they are doing exactly that - waiting too long. When they finally start we shall see all kind of s...t
After The FOMC: Countdown To Liftoff
The Fed has wrapped up its June FOMC meeting. No surprises. The economy is getting better, so they say. While the Fed says they have made “considerable progress” toward its goal of maximum employment, “the committee wants to see evidence of some further progress.” They are not hiking rates right now; they will probably hike rates in September, but don’t worry about the exact date because it will be so small and gradual you will hardly notice. That’s the quick version from the Fed.
Further wage and job gains could give Fed officials confidence that inflation, which has lingered below their 2 percent goal for three years, is likely to move higher. Growth is poised to pick up as consumers start spending a windfall from lower gasoline prices, even though that hasn’t happened yet. The economy is likely to expand at a 2.5 percent annual pace in the second quarter after shrinking 0.7 percent in the previous three months. Officials now expect the economy to grow this year between 1.8 percent and 2 percent.
Just a few months ago, in March, they had predicted growth of 2.3 percent to 2.7 percent. The contraction in the first quarter was caused in large part by temporary forces, including unusually severe winter weather and a slump in energy-industry investment brought on by lower oil prices. The Fed is aware of risks overseas, such as the slowdown in China and the danger of a Greek default. The FOMC statement has dropped explicit forward guidance and now they say rate decisions will be data dependent and will be made on a month to month basis.
And so we can conclude from this that the Fed will raise interest rates in September. Based on new economic forecasts we can anticipate two quarter-point rate rises this year but a shallower pace of increases in 2016. They maintained their projection that the benchmark rate would rise to 0.625 percent in 2015, while dropping it to 1.625 percent next year, just a little lower than their March median forecast of 1.875 percent.
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Fed's Powell: Conditions for rate hike could be met in September
The conditions needed for the first rate hike potentially could be satisfied "as soon as September," said Federal Reserve Governor Jerome Powell, on Tuesday. Powell said that he wasn't saying that a rate hike was certain at the Fed's September meeting but said he thought there was a 50-50 chance of a move. "It depends on the data," Powell said. His comment came in a breakfast conversation sponsored by the Wall Street Journal. Powell said his own forecast calls for a second rate hike in December.
Yellen repeats Fed on track to raise rates before ‘year end’
Sounding an upbeat note, Federal Reserve Chairwoman Janet Yellen said she expects the U.S. economy to strengthen over the rest of 2015 and put the central bank on a path to raise interest rates “at some point this year.”
Yet the Fed chairwoman gave no hint on when or how many times the bank is likely to raise a key short-term interest rate that has been hovering near zero since 2008. Most Fed watchers think the bank will make its first move at a mid-September meeting.
In her twice-year testimony before Congress, Yellen was notably more optimistic compared to her last appearance in February. But she deviated little from a speech she gave last Friday in Cleveland in which she laid out her views.
“Many households have both the wherewithal and the confidence to purchase big-ticket items.”
Janet Yellen
“Looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly.”
She pointed to cheaper gasoline prices, higher consumer confidence and a pickup in consumer spending, particularly new cars and trucks. That suggests “many households have both the wherewithal and the confidence to purchase big-ticket items,” she said.
Although hiring has slowed from a torrid pace at the end of 2014, Yellen said the economy is still creating enough jobs to reduce the unemployment rate over time. The jobless rate was 5.3% in June.
She also said “other measures of job market health are also trending in the right direction,” but there is “still some slack.”
For the first time, Yellen also made clear reference to specific events overseas, namely Greece and China, that could “pose some risk” to the U.S. economy.
The “situation in Greece remains difficult,” she said. “And China continues to grapple with the challenges posed by high debt, weak property markets and volatile financial conditions.”
Nonetheless, Yellen appeared to indicate that the risks are small.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target.”
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Yellen says Fed to hike this year, Gundlach says she won't
Yellen said today that the Fed is likely to hike in 2015 but Jeffrey Gundlach says she's wrong. The new bond king has long taken a dovish view on the Fed and he's been right.
His simple explanation is that Yellen expects economic data to continue to improve; he doesn't. If he's wrong, he said that when the Fed has hiked rates and nominal GDP growth was less than 5%, it's had to reverse course.
On bonds, he said they're entering a secular bear market and yields will continue to 'melt up'.
What fewer people are talking about is that the US dollar looks like it's poised for another breakout. That ramp may further hurt US trade and weaken the economic outlook.
Larry Fink, Paul Singer and Carl Ichan are also set to speak at the Delivering Alpha conference
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Hilarious :