Posted on 08/29/2016 3:06:33 AM PDT by expat_panama
Federal Reserve Chair Janet Yellen said Friday that the case for a rate hike has "strengthened" in recent months, as labor market slack is fading.
The U.S. economy is "now nearing the Federal Reserve's statutory goals of maximum employment and price stability," Yellen said.
Financial markets, which already have been pricing in a good chance of a rate hike in December, initially took her comments in stride. Investors are less concerned about the timing of the next hike than the one after that. Treasury yields initially rose a bit, then headed slightly lower after release of Yellen's speech transcript.
That was before Fed Vice Chairman Stanley Fischer told CNBC that he saw Yellen's comments as consistent with a rate hike at the September meeting. Further, he said, a second increase could come as early as December...
...The path of rate hikes next year is the big issue for investors. Even as markets have shifted in recent weeks toward expecting a rate hike as early as December, the 10-year Treasury yield has drifted slightly lower. The reason markets have been so calm about the next rate increase is that investors don't expect an ensuing hike until at least the fall of 2017.
Yellen, as expected, didn't offer any precise timing for the next Fed interest rate hike... ... New data on Friday were on the soft side, though, with second-quarter GDP growth revised down to 1.1%, and the University of Michigan's consumer sentiment index slipping unexpectedly.
Banks, which stand to benefit from higher rates, perked up with Yellen's comments about a stronger case for a rate hike, but later gave up much of their gains. JPMorgan Chase (JPM), Citigroup (C) and Wells Fargo (WFC) each saw minor gains, but Bank of America (BAC) was up 1.4%.
(Excerpt) Read more at investors.com ...
“Messages”? Read: “Panic”.
Good morning and welcome to August's last week!
Stocks closed last Fri. mixed a tiny fraction in rising trade volume and this morning's futures are for more today. Gold'n'silver seem to be also plugging along not as bad as we'd feared but not quite what we wanted, they're now at $1,320.08/$18.61 --but futures traders see them jumping up +0.44%.
An hour before the bell we get Personal Income, Personal Spending, and Core PCE Prices (my bet is the PCE shud answer a few investing/Fed questions).
Lots to read meanwhile:
Hillary's Plan Will Lead Us Over a Cliff - Stephen Moore, Washington Times
Trump Seeks More Tax Increases Than Reductions - John Tamny, Forbes
Snooze Economy Redounds to Hillary - Robert Samuelson, Washington Post
Unraveling the Story About Secular Stagnation - Steve Hanke, Globe Asia
Today's Inequality Could Be Tomorrow's Castrophe - Robert Shiller, NYT
Central Bankers Spurn Radicalism Call - Steve Matthews & Jeff Black, BBW
The Federal Reserve's Rate Hike Timing Is Lousy - Editorial, Investor's
Maybe We Pushed Down Too Hard on Finance - Barry Ritholtz, Bloomberg
The Looming Shakeout in Digital Media Space - Michael Wolff, USA Today
Isn’t it nice to know that our markets are driven now not by the forces of free enterprise but by the utterances of our central planners.
They will leave a mess for trump
A smorgasbord of articles indeed, with heuristic value. “Maybe We Clamped Down Too Hard on Finance” is my favorite, thus far.
On the other hand some of the writers need to be checked in at the loony bin.
“We are nearing full employment”...indeed?
Inequality is going to destroy the world so we need to take more than 1/3 of the wealth from the advantaged via death duty & wage tax or the sky will fall.
Tell me that these articles are being used for wrapping meat at the butchers, please? It’s disheartening to find socialist economists are considered so mainstream. The kool-aid is strong in this crew.
A smorgasbord of articles indeed, with heuristic value. Thanks for the links & post. “Maybe We Clamped Down Too Hard on Finance” is my favorite, thus far.
On the other hand some of the writers need to be checked in at the loony bin.
“We are nearing full employment”...indeed?
Inequality is going to destroy the world so we need to take more than 1/3 of the wealth from the advantaged via death duty & wage tax or the sky will fall.
Tell me that these articles are being used for wrapping meat at the butchers, please? It’s disheartening to find socialist economists are considered so mainstream. The kool-aid is strong in this crew.
They can’t raise rates, so the only arrow they have left in their quiver is to somehow, without actually saying it, get people to THINK they may raise rates, so act as if they were going to go up soon.
Except more and more people are onto their game.
The Fed will raise rates just in time to affect the economy to grease the skids for Hillary...
People who have security / economic concerns don’t vote for change...
Trump is change...Hillary is status quo...
"ignore the blood and gore on the floor - don't the corpse look nice?"
When the GDP needs to be at +2% just to have the economy stable
anything less than 2% signifies recession.
If Yellen believes that 1.1% is stability,
I'll bet she also believes the labor statistics coming out of Washington
... and she is the only one who does believe them to be true.
They kind of tell me a lot more about what folks are thinking that what's going on. Sometimes it seems that the publisher writes a list of titles he'd like put in print and then hands 'em off to the writers to grind out.
Writers get paid to produce what folks want to read, not what makes sense.
The economy is really big. Some markets are driven by utterances, others by what traders think the utterances are going to be, and other markets are driven by what real money is doing now.
bump
I wonder how long Yellen has been on meth?
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