There could be sufficient economic data for the Federal Reserve to consider a rate hike at their meeting later in October but there will be a lot more data on hand in time for the December meeting, Atlanta Federal Reserve Bank President Dennis Lockhart said on Monday. “Although the outlook for domestic demand is good, global forces are weighing on net exports and inflation, and the risks from overseas appear tilted to the downside”. Palladium sank 1.3 percent to $684.80 an ounce.
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The Federal Reserve should wait for “tangible evidence” of a pickup in USA inflation and hold short-term interest rates near zero into next year, Federal Reserve Governor Daniel Tarullo said.
Following the speech, Mr. Evans said he can envision a series of three separate quarter-point rate increases in 2016, and reiterated that he thinks any move should be gradual. He pointed to the fact that eventually the impact of the oil price decline will be washed out of the inflation calculation.
Chow Tai Fook, one of the largest gold retailers in China, said its sales of gold products in the country rose 22% in the three months ended Síeptember. Yet, the Fed Governor still fell short on optimism, noting that “the labor force participation rate remains materially below the pre-recession trend, even after adjusting for demographics”. Regarding U.S. employment, Fischer is less rosy.
The chart above illustrates the high level of correlation between the LFPR and the unemployment rate.
What happens in China has an important – though not decisive – influence on Fed thinking. Yellen has stressed that the Fed would make a decision based on incoming economic data.
The worry is that the drag from overseas could intensify, hurt US growth, and push job creation even lower.
Fischer said the focus in recent FOMC statements on foreign developments is natural, given the… Thus, we could see a rate hike at one of the Fed’s two remaining 2015 meetings in October and December.
Asked Tuesday on CNBC-TV if he expected a hike this year, Tarullo said, “I wouldn’t expect it would be appropriate to raise rates” given his expectations of where the economy is headed.
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Hedge funds and other money managers cut net bullish bets on the dollar to the least since September a year ago in the week through Tuesday last week, according to data from the US Commodity Futures Trading Commission in Washington.
