Top Fed Officials Pushing for Interest Rate Hikes

Top Fed Officials Pushing for Interest Rate Hikes

Top Fed Officials Pushing for Interest Rate Hikes

$DIA, $SPY, $QQQ, $VXX

As central bankers converge on Jackson Hole Thursday for an annual conference on monetary policy, a couple of top US Fed officials took the chance to renew a push for interest-rate hikes, citing improvement in employment and inflation.

“The case is strengthening” for a rate hike, Dallas Fed President Robert Kaplan said. “And you should conclude from that in the not-too-distant future … I think we’re moving toward being able to take another step.”

Kansas City Fed President Esther George, whose bank has hosted the conference here since 1978, had an even stronger message.

“I think it’s time to move,” she said.

The US Fed raised interest rates for the first time in nearly a decade in December, but has kept them on hold since then on concern that headwinds from abroad and financial market volatility at home could hurt growth.

Recent strong readings on the labor market, and signs that inflation is finally beginning to pick up, have begun to encourage some policymakers that rates should rise, if not as soon as next month’s meeting then at least before the end of the year.

Investors are awaiting a speech Friday by Fed Chairwoman Janet Yellen for more definitive clues about the timing of a rate hike.

Chicago Fed President Charles Evans has long called for patience in raising rates so as to give inflation a better chance of reaching the Fed’s 2% target sooner.

Traders currently put chances of a December rate hike at about 42%.

The Fed hawks call to raise rates stands in stark contrast to the likely next moves from many other global central banks whose representatives are meeting here, including policymakers at the central banks for Europe and Japan, where prolonged economic weakness has all but ruled out any near-term contemplation of tighter monetary policy.

It also is anathema to the dozens of activists planning to protest outside of the lodge where the 3-day conference begins Thursday. Fed Up, a network of community organizations and labor unions, will meet with Ms. George and 6 other policymakers later to air their concern about the impact higher rates will have on America’s poor.

Note: New orders for U.S. manufactured capital goods rose for a 2nd month runnng in July as demand for machinery and a range of other products picked up, offering a tentative signal that a business spending downturn was starting to ease.

Also, the US economy got a boost from a report Thursday showing an unexpected drop in the number of Americans filing for unemployment benefits last week.

Thursday, the US major stock market indexes finished at: DJIA -33.07 at 18448.41, NAS Comp -5.49 at 5212.20, S&P 500 -2.97 at 2172.47

Volume: Trade was light with 696.3-M/shares exchanged on the NYSE

  • Russell 2000 +9.0% YTD
  • S&P 500 +6.3% YTD
  • DJIA+5.9% YTD
  • NAS Comp +4.1% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Neutral (0.20) Neutral (0.05) Neutral (-0.02) Very Bullish (0.58)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Bullish (0.31) Neutral (0.19) Bullish (0.31) Bullish (0.42)
HeffX-LTN Analysis for QQQ: Overall Short Intermediate Long
Bullish (0.28) Neutral (0.21) Bullish (0.29) Bullish (0.33)
HeffX-LTN Analysis for VXX: Overall Short Intermediate Long
Bearish (-0.43) Neutral (-0.19) Bearish (-0.40) Very Bearish (-0.71)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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