“There is quite significant uncertainty about what’s actually going to happen, I don’t think anyone quite knows,” Fed Vice Chair Stanley Fischer said on Saturday, but with Chair Yellen set to testify today before the Senate Banking Committee, Bloomberg’s Richard Breslow is amazed how a debate can continue to rage about how hawkish she may or may not be. That’s neither a testament to the effectiveness of the Fed’s communication strategy nor how effectively their messaging is being processed.
If you take the weight of everything they’ve said, it would indeed be a shock if she actually does make an attempt to put March back on the table. And frankly, whatever is said about June and beyond, is only just another forecast, to be priced by the market another day.
I thought it was a mistake that the FOMC’s January minutes left March out of the conversation. But they did. And little has changed since then to make the chances of an about-face obvious.
Core PCE hasn’t seen the 2% level since 2012. And let’s face it, the wage numbers in the latest non-farm payrolls were decidedly underwhelming. They were willing to raise last December, even short of their mandates, but seem likely to only take that so far, so fast.
Minneapolis Fed President Kashkari laid out the case for waiting to see inflation actually at target before pulling the trigger again. I got the sense he probably won’t be one of the one’s declaring ‘mission accomplished’ the first time it happens. But you never know.
This post was published at Zero Hedge on Feb 14, 2017.
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