US Fed Will Not Consider An Interest Rate Rise Until The Fall

Posted by: : Paul EbelingPosted on: May 5, 2014 US Fed Will Not Consider An Interest Rate Rise Until The Fall

US Fed Will Not Consider An Interest Rate Rise Until The Fall

The US Federal Reserve is scheduled to bring its bond-buying program (QE) to an end this October, only after that will it consider when to raise US interest rates, that according to what Richard Fisher said in a TV interview Sunday.

“I personally expect us to end that program in October,” Dallas Federal Reserve Bank President Richard Fisher said the interview o. “Then we have to see how the economy is doing, including these broader measures of unemployment and where we stand before we can talk about how we might move the short-term rate.”

US unemployment registered 6.3% in April, a government report showed Friday. But broader measures of the strength of the labor market, including the labor participation rate and hourly wages, indicated the jobs market is far from strong.

More workers are dropping out of the labor force, data showed, suggesting that many saw job prospects too poor to merit a job hunt. Average hourly wages last month did not grow at all.

“It’s too early to tell,” Mr. Fisher said of when the economy will be ready for higher rates. “I’ll make this prediction: some time in the next 100 yrs, interest rates will go up.”

The Fed has kept short-term US interest rates near Zero since December 2008 and has bought trillions of dollars in long-term securities to help boost the economy and bring down unemployment.

Five months ago, with unemployment down from its recession-era high around 10%, the Fed began cutting back on its monthly bond-buying stimulus (QE).

Last week it continued that process, trimming its monthly purchases from $55 to 45-M.

The Fed has said it will keep rates near Zero for a “considerable time” after it ends its bond-buying program so that it can assess the strength of the economy.

Mr. Fisher, who votes on Fed policy this year, has wanted to end the bond-buying program, and has warned that keeping rates too low for too long could feed unseen financial market bubbles.

Stay tuned…

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Paul Ebeling

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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