The reasons for proceeding with a new rise in interest rates “have strengthened in recent months,” the presence of a greater optimism on the economy. But if this is enough to put on the table the option of Federal Reserve actions already at the next summit on 20 and 21 September – or by December – it is not nearly enough to promise with a narrow time certainty.
Janet Yellen , the international Federal Reserve in Jackson Hole Symposium, has sought to clarify the Hamlet monetary policy stance of the Federal Reserve, however, only partially succeeding. The verdict on his speech was made by the market jitters: equities and bonds have reacted with immediate strokes to the first words of the president of the US central bank, rising in unison, and then retrace their steps to the rapid re-emergence address Question ever, tight or not tight. Stock indices fell in the negative. To confuse even more operators we thought an interview with TV network CNBC Vice Yellen, Stanley Fischer, who disliked the habit operators to a cacophony of voices from individual members of the central bank wanted to add as the words of Yellen do not exclude even two rate hikes by December.
Still only generic words
Piazza future, where taking bets on movements in interest rates, for its part, raised no upset them the chance of a close, still considered unlikely, at 32%, the next month and risen to 57% from 50% only in December. The presence of the appointment of the election for the White House and Congress on November 8 pushes many a trader to imagine that, despite everything, the Fed wants to avoid excessive risk before that date. “In the end I do not think there is really very new,” he was the terse comment of Mark Grant, Hilltop Securities, the intervention of the Fed chairman.
“In light of the continued strong performance of the labor market and our outlook for economic activity and inflation – said Yellen front of central bankers and Treasury officials from dozens of countries at the event organized by the headquarters of the Kansas City Fed in Wyoming – I believe that the reasons for an increase in the federal funds rate They have been strengthened. ” Later came the clarification: “Our decisions depend on the degree in which the incoming data conforms to the Outlook» Fed. A telegram to investors, in short, on the importance that will have the next round in particular with the occupation , who marched to the 190 thousand new jobs in the last three months rhythm and is expected Friday, September 2nd with a new test of strength in August if necessary to justify a close in the coming months.
Fed marching towards the ‘new normal’
Yellen left no doubt to be reasonably satisfied with the economic developments. “If the growth was not fast, was sufficient to generate further improvements in the labor market,” he pointed out, that is, driving out the concerns that had held back the hands of the Central Bank in the first half of the year when GDP up by 1 % – the second-quarter performance was yesterday revised downward to 1.1% from 1.2% – and a slowdown in job creation had been added to global uncertainties such Brexit and the Chinese slowdown. “We expect moderate growth, further strength in employment and inflation to rise to 2% in the coming years,” he said.
A similar horizon offers perhaps the only certainty: that the Fed ” is appropriate anticipates a gradual increase in interbank rates over time. ” But how much this is worth in terms of concrete and tight forecasts has openly revealed the same Yellen, who in recent years has moreover tried not to use the Jackson Hole symposium in Wyoming, as did his predecessor Ben Bernanke, to reveal moves the Fed reserving the institutional settings. If the average forecast of the Central Bank’s top management currently sees short-term rates 1.625% at the end of 2017, the president yesterday preferred to cite other level is not exactly enlightening: 70% chance that rates are between 0 and 3 , 25% to December of next year. “The economy – he explained – is frequently shaken by shock and rarely evolves as predicted.”
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