A robust report on U.S. employment released last week has strengthened the conviction of economists who have been forecasting a December interest rate increase from the Federal Reserve, according to a Reuters poll published on Tuesday.
Nowadays many of us don’t what to make of the numbers or what to believe anymore. There certainly is a school of thought the market didn’t rally because they now believe the Fed will raise rates in December.
Fed Chair Janet Yellen piled onto the crude oil market after telling Congress that a December rate hike was a, "Live possibility!" Live--it’s a December rate hike! Maybe Yellen instead of Donald Trump should be on Saturday Night Live because she seems to get a major reaction to saying "live"!
Zero-bound money – quality aside – lowers incentives to expand loans and create credit growth. Will Rogers once humorously said in the Depression that he was more concerned about the return of his money than the return on his money.
After yesterday’s hawkish FOMC statement we should prepare for even more scrutiny of every U.S. economic release, starting with today’s GDP reading, as investors once again try to anticipate whether or not we’ll get a rate hike in December.