U.S. Outlook: Dissecting FOMC intentions

Scott Anderson
Posted by Scott Anderson
Chief Economist

The Federal Reserve remained coy in its July statement about when to initiate the first Fed funds interest rate hike.

Graph showing monthly totals of jobs created (or lost) in the past 5 years.On Thursday the Fed funds futures markets put the probability of the first rate hike in September at around 46%, and by the December meeting the probability rises to 76%.

For more on this and other developments this week, see my full report. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on July 31.

Key observations:
  • The Fed continues to inch closer to its monetary policy goals.
  • We are forecasting another net 224K nonfarm jobs were created in July, with the unemployment rate holding steady at 5.3%.
  • If it wasn’t for continued lackluster consumer inflation rates, the Federal Reserve would have already begun to raise rates.
  • There does appear to be a growing realization in the Treasury market that the Fed will be moving soon
Click here to read my full report.

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