On Thursday, Atlanta Fed President Dennis Lockhart said the United States central bank’s last policy statement was deliberately trying to convince investors of a possible December rise and was successful in doing so.
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“We need data to convince us they’re not going to raise – it is very, very clear (there will be a hike) but it is still data dependent”, he said.
Emerging markets were the hardest hit following the Fed announcements, with broad declines worldwide.
Is December “live”…Yes and at least the market is greater than 50% of a rate hike in December (it got up to 58% I think). Separate data showed the USA trade gap shrank in September to a seven-month low, while another gauge showed service producers unexpectedly expanded in October at the second-fastest pace in a decade.
Economic strength in certain parts of the nation, especially Silicon Valley in California and in the New York-Washington, D.C., corridor, is masking less vitality in other areas, Malpass said in an interview with The Arizona Republic before speaking to officials and clients of Arizona Bank &Trust on Friday. She is of the opinion that raising rates gradually – possibly starting this December – is a much better path than waiting too long and having to raise rates too quickly.
Markets are taking Yellen and the Fed seriously.
Paul Ashworth, at Capital Economics, said the strong figures “confirms that the weakness in August and September was just a temporary blip and, given the circumstances, a December interest rate hike would now appear to be the most likely outcome”.
Yellen’s comment that December remains a “live possibility” for a rate increase put the brakes on a rally that had carried the Standard & Poor’s 500 Index to within 1 percent of its record.
Thomas Simons of Jefferies wrote to clients of the Fed, “Barring a complete disaster in November [payrolls], they are on track” for December liftoff.
How stocks react to the jobs number could hint at investors’ comfort level with a rate hike. One thing that Fed Chair Yellen mentioned was moving in a timely fashion to raise rates – that is not sticking around at 0% through the rest of the year and then having to raise rates all at once.
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NEW YORK, Nov 5 (Reuters) – The dollar hit a three-month high against a basket of major currencies and a two-month peak versus the yen on Thursday, underpinned by comments from Federal Reserve officials suggesting a growing chance of an interest rate hike next month.
