The Federal Reserve is keeping the door open for an interest rate hike later this year despite uncertainty caused by the presidential election, according to Thesis Asset Management.
The split among the members of the Federal Open Market Committee over the last rate decision revealed by the meeting minutes, and the dovish tone, presents some fresh food for thought for investors.
The United States’ non-farm payroll growth in July comfortably outstripped forecasts, according the Bureau of Labor Statistics.
The Federal Reserve’s decision to hold rates at 0.25-0.5% announced last night surprised nobody, but the accompanying rhetoric suggested a more hawkish stance is emerging.
This week’s Federal Reserve meeting presents a particularly difficult set of circumstances to the Federal Open Market Committee.
Fed chair, Janet Yellen, announced on Wednesday that the Federal Reserve had once more kept rates steady and signalled fewer hikes in the future.
The Federal Reserve has opened the doors to a “globally aware” monetary policy, according to Ewan Thompson, head of emerging markets at Neptune.
Despite Friday’s poor jobs numbers, Federal Reserve Chair, Janet Yellen, was positive on the overall labour market in a speech on Monday, but emphasised that monetary policy is not on a pre-set course as there remain some key uncertainties.
A Federal Reserve interest rate rise this month is now widely considered off the table after the latest non-farm payroll number came in significantly below forecasts.
The Federal Reserve seemingly nudged the door open a fraction for the second interest rate rise since the financial crisis when it released its latest minutes last night.
As the Federal Open Market Committee settles into another two day meeting, investors would be right to have low expectations on the level of clarity they will get as a result.
So, an ‘expedited’ Fed meeting was called on Monday (11th April) to discuss interest rates. Nothing unusual in that, if in isolation, but the meeting was followed immediately by a debrief to the President and Vice-President by Janet Yellen. Not common practice by anyone’s standards!
