Few Reasons to End Fed’s ‘patient’ Stance on Rates

Few Reasons to End Fed’s ‘patient’ Stance on Rates

$DIA, $SPY, $QQQ, $RUTX, $VXX

FLASH: Next Fed rate hike several FMOC meetings ahead

With inflation muted, but other risks to the US economy on the rise, the Fed’s patience on policy is nowhere close to running out, with 1 previously Kawkish central banker Tuesday signaling he could wait until at least June before touching interest rates again.

“It may be several meetings of the Federal Open Market Committee before Fed policymakers have a clearer read on whether the risks are becoming reality – and by how much the economy will slow compared to last year,” Eric Rosengren, President of the Federal Reserve Bank of Boston, told a chapter of the National Association of Corporate Directors in Boston.

That timeline suggests that for him at least, the Fed’s next 2 meetings in mid-March and in late April would be too soon to expect a change to policy. The next meeting after that takes place in mid-June.

That is hard shift for a policymaker who for most of last year warned that the economy could overheat without rate hikes.

Tuesday, Mr. Rosengren noted little inflation pressure and sharp market swings at the end of last year made those concerns seem “less pressing.”

At the same time, slower growth in Europe and China and ongoing trade conflict make it hard to have confidence about the US economy staying strong, Rosengren said.

“Patiently watching to see how the economy develops is the appropriate policy for now,” he said.

Tuesday, the US major stock market indexes came in at: DJIA-13.02 at 25806.63, NAS Comp -1.21 at 7576.38, S&P 500 -3.16 at 2789.61

Volume: Trade on the NYSE came in at 864-M/shares exchanged

  • Russell 2000 +16.2% YTD
  • NAS Comp +14.2% YTD
  • S&P 500 +11.3% YTD
  • DJIA +10.6% YTD

HeffX-LTN’s overall technical outlook for the US stock market indexes is Bullish in here.

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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