Buffy may have her way on slaying vampires, but she has nothing on Fed Chair Janet Yellen when it comes to killing commodities. Yellen’s testimony to Congress basically assured us that the Federal Open Market committee will raise rates in December as the economy is making significant progress.
What will have more impact on crude oil trading today? Will it be news out of OPEC, or the testimony in Congress by Fed Chair Janet Yellen? We know that comments from the Russian oil minister Alexander Novak saved oil from selling off more after he said that he remains optimistic that OPEC can get a deal done by the time of the official meeting on Nov. 30.
The Federal Reserve kept interest rates unchanged on Wednesday in its last policy decision before the U.S. election, but signaled it could hike in December as the economy gathers momentum and inflation picks up.
Against this backdrop, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2%. The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.
Next month’s election is the first since the Federal Reserve ended Quantitative Easing (QE) efforts. But it’s clear that monetary policy and the Fed has taken the spotlight away from the candidates’ fiscal policies and plans for economic growth. This is the direct result of two major trends over eight years.
This is a very pointed "macro" follow up to my post-Jackson Hole extensive reviews of why the FOMC was NOT going to hike Wednesday afternoon. This remains disconcerting in the wake of all the hawkish rhetoric since before and after last December. The picture of Fed Chair Janet Yellen is not from Wednesday afternoon’s press conference, but rather her Feb. 24 congressional testimony. It makes plain just how hawkish the Fed remained after last December’s first hike in almost a decade.
"We trust the economy, yet not enough to tighten monetary policy” -- this was the message sent by Federal Reserve Chair Janet Yellen to markets on Wednesday to explain the motives for keeping rates on hold in September.
The U.S. Federal Reserve left interest rates unchanged on Wednesday but strongly signaled it could still tighten monetary policy by the end of this year as the labor market improved further. Fed Chair Janet Yellen, speaking after the central bank's latest policy statement, said U.S. growth was looking stronger and rate increases would be needed to keep the economy from overheating and fueling high inflation.