But the Fed hasn’t relented yet, and while they may not hike at their next meeting, we can certainly see a “hawkish hold” scenario similar to a year ago; and this could reinvigorate the Greenback.
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On Monday, Trump, the Republican Presidential candidate said that the Federal Reserve has created a “false economy” and that interest rates should change.
What does a former reality-TV star who lives in a Vegas-style imitation-Louis-XIV Manhattan penthouse know what is and isn’t real in this world?
The central bank meets September 20-21 after officials have stood pat on rates this year and twice pared projections for the path of increases.
“The Fed now looks certain to keep rates on hold this month”, said Shuji Shirota, head of macro economics strategy group at HSBC in Tokyo. The U.S. non-manufacturing new orders index for August fell to its lowest since December 2013.
– While discussing a meeting in three months might seem pointless to many traders, in a Central Bank-driven market, these themes can carry a pervasive impact to price action across markets; and this uncertainty around near-term FOMC policy can create opportunities on both sides of the market.
As weak USA service sector data darken the economic outlook and elevated uncertainties over whether the Fed will increase interest rates this year, the dollar decline compared to the other major currencies this Wednesday.
Gold futures drifted into negative territory Thursday in the U.S. after another Federal Reserve member indicated that a September rate hike was possible.
In his prepared remarks Williams did not address the release of data on Tuesday that showed activity in the USA services sector had hit a six-and-a-half-year low, or government data last Friday that showed U.S. employers added fewer jobs than expected in August. New York Fed President William Dudley said that as the USA labor market tightens and as evidence builds of wage gains, “we’re edging closer towards the point in time where it will be appropriate I think to raise interest rates further”. “We see more potential upside from here with September now looking highly unlikely for rates to move higher”. “It’s possible” to hike rates at the next scheduled policy meeting on September 20-21, he said on the Fox Business Network.
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Williams first raised the idea of ripping up the Fed’s monetary policy playbook last month, when he also began advocating more strongly for a rate hike. A Reuters poll of economists last week also pointed to December-after the USA presidential election-as the most likely timing for a hike.
