Fed, employment will be the compass for the rate hike – The Republic

MILAN – But in the end, gave indications that Janet Yellen from the Jackson Hole summit? Judging by the reactions of the market and its main protagonists, on the next rate hike we know little more than before. The Federal Reserve chairman has used the tone a bit ‘harder to care workers, who are used to seeing it go from dove scene made it clear that the Fed’s objectives are closer, that the growth of the labor market and economic ( though not overwhelming) there are and will be. All of which reinforce the potential of close to the cost of money. But did not say over and not randomly euoropei markets, who were coming to closure when Yellen spoke in Italian Friday afternoon, you are led to moderate increases.

Shortly thereafter, the vice president Stanley Fischer spoke the microphones of CNBC, and in line with the latest statements of many of his colleagues approached a move as early as September would be the second increase after that of last December, arrived after seven years of rates near zero. Asked if there was a possibility for a further rise this year, he responded affirmatively. Words received by markets with a rise in yields on US Treasuries and the dollar, which saw a possibility to speed up the monetary tightening path. In contrast, the S & amp; P500 Wall Street has backtracked and is back to the beginning of the month levels.

In short, as often happened, the Fed gave the impression of wanting to keep the markets in these times on “who goes there?”: the statements of many central bank officials seemed lately Use the “tears”, the “reminders” to ensure that the market is ready to close, and can not say that it came suddenly.

Mohamed El-Erian, an economist at Allianz, says that at this point Yellen raise rates, if the incoming data are strong. “If we were to have a positive employment report (is coming on September 2, ed ), with the creation of 200 thousand jobs and sustained growth of wages, the Fed would be difficult to avoid a monetary tightening, possibly as early as September but certainly in December “. In his interview with Bloomberg television, remarks that “everything will depend upon the report on the work.” According to the agency financial analysts monitored the USA, this month should be created 185 thousand jobs, from 255 thousand in July, while the jobless rate should be decreased to 4.8% from 6.2% in August of two Years ago. According to futures on the Fed Fund, which anticipate the next policy moves, the chances of a rise to 0.5-0.75% rate in September rose 32-42% after Yellen’s speech, while for December have exceeded 70%.

Topics:

Fed

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bags

markets

Starring:

Janet Yellen