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28 Jan 2015
Weather to make Fed's decision more complicated - Hilsenrath
FXStreet (Bali) - Fed's watcher and WSJ editor Jon Hilsenrath, in his latest piece, discusses how bad weather in the United States could complicate a decision by the Fed to change its policy rhetoric for the coming months.
Key Quotes
"Fed officials need to decide in March whether to signal they will continue to "be patient" about raising short-term interest rates. Chairwoman Janet Yellen has signaled the Fed will remove or alter the language from its policy statement two meetings before its first interest rate increase."
"If officials want to move in June -- as many have suggested they're inclined to do --patience would need to go in March.This all makes economic data during the next couple of months especially important, because removing the patience language is not an obvious call today."
"Though unemployment is falling -- a sign of shrinking slack in labor markets -- inflation continues to run below the Fed's 2% objective.Bad weather has the potential to muddy the Fed's reading of economic developments as it approaches this important decision. That's what happened last year."
"The stakes are high for the U.S. central bank these next two months. And the weather isn't likely to make the Fed's decision much easier."
Key Quotes
"Fed officials need to decide in March whether to signal they will continue to "be patient" about raising short-term interest rates. Chairwoman Janet Yellen has signaled the Fed will remove or alter the language from its policy statement two meetings before its first interest rate increase."
"If officials want to move in June -- as many have suggested they're inclined to do --patience would need to go in March.This all makes economic data during the next couple of months especially important, because removing the patience language is not an obvious call today."
"Though unemployment is falling -- a sign of shrinking slack in labor markets -- inflation continues to run below the Fed's 2% objective.Bad weather has the potential to muddy the Fed's reading of economic developments as it approaches this important decision. That's what happened last year."
"The stakes are high for the U.S. central bank these next two months. And the weather isn't likely to make the Fed's decision much easier."