Market Commentary
Semantics - Fed watch is all about 'semantics.' Will they, wont they?
According to the Wall Street Journal's main Fed watcher Jon Hilsenrath, Fed Chair - Yellen may have deftly "laid the groundwork for interest-rate increases later this year." Yellen told lawmakers yesterday that the U.S. economy is making steady progress towards what the Fed defines as the "maximum employment" — an unemployment rate which lies between 5.2 percent and 5.5 percent. Now since the jobless rate in January 2015 stood at 5.7 percent, which is down from the remarkably high 10 percent recorded in late 2009, then we are almost within touching distance of the definition of 'full employment'. Yellen told lawmakers - "Provided that labor market conditions continue to improve and further improvement is expected, the committee anticipates that it will be appropriate to raise the target range for the federal funds rate when, on the basis of incoming data, the committee is reasonably confident that inflation will move back over the medium term toward our 2% objective." So the key question seems to hover around consumer inflation. But the US currently is nowhere near the target of 2%. In English - more semantics - yes we intend to raise rates when inflation rears its head but for the moment we have strong steady economic growth without immediate cause for concern. Sigh of relief for the stock markets but the market is still buying into widening interest rate differentials.
US DX
94.186 -0.012 -0.02%
Support 93.982 Resistance 94.602
EUR
1.136520 +0.001615 +0.14%
Support 1.13100 Resistance 1.14180
Crude Oil
50.61 -0.38 -0.77%
Support 47.38 Resistance 53.08
Gold
1205.80 -3.95 -0.33%
Support 1,193.6 Resistance 1,215.6
Pieter Bergli - DeLoren Trust Holdings
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