Federal Reserve Expected To Signal Higher Interest Rates

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  • #17558
    Helmholtz Watson
    Participant

    The Federal Reserve is expected to leave rates…

    [article]974[/article]

    #17594
    TradersCom
    Keymaster

    One they watch (and confuses them)

    US Q2 employment cost index 0.6%% vs +0.7% expected
    Prior quarter +0.8%
    Wages and salaries up 0.5% vs Q1 0.9% gain
    Benefit costs +0.9% vs 0.7% in the Q1 Prior

    #17607
    TradersCom
    Keymaster

    Barclays on FOMC “We think the main message will remain unchanged; in the face of sizeable stimulus, improving labor markets, and steadily firming inflation, further gradual rate hikes remain the most likely outcome. “

    #17617
    Helmholtz Watson
    Participant

    Otavio (Tavi) Costa @TaviCosta

    The last time junk bond yields had such a large % move as today, $SPY was down over 6% on the same day. $SPY longs look out below.

    #17835
    Helmholtz Watson
    Participant

    FOMC Minutes for the Aug 1 Federal Reserve meeting

    Highlights

    Saw trade, housing and emerging markets as downside risks
    Generally expected further gradual hikes
    Generally noted considerable momentum in household and business spending
    Generally expected GDP growth would slow in second half of the year but remain above potential
    Many participants saw another hike likely ‘soon’
    Most participants said escalation of trade disputes a potentially consequential downside risk for US economy
    Powell said Fed would likely resume discussion of operating framework for monetary policy in the fall

    https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20180801.pdf

    #17931
    Helmholtz Watson
    Participant

    Nick Burwell @NickBurwell1

    Personal Consumption Expenditures #PCE, the Fed’s preferred #inflation gauge- tied to consumption, rose 2.3% in July from a year ago. Highest YoY reading since early 2012. Will be difficult for the #Fed to back off expected #rate hike path

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