Daily Traders Edge

Fed needs to raise rates to avoid fate of other nations – CNBC

June 15
14:28 2016

Ahead of every Federal Open Market Committee meeting, investors get all whooped up into a feeding frenzy over whether the Fed is going to raise the short-term interest rate. Federal Reserve Chair Janet Yellen repeatedly states that the central bank is data-dependent. That seems reasonable. But the data will never give market participants the perfect set of conditions that render an interest-rate hike non-debatable.

The strength of the data, including U.S. gross domestic product, has been uneven. Individual Federal Reserve bank presidents give conflicting speeches. Janet Yellen herself recently gave a (relatively) hawkish speech, only to walk it slightly back due to the recent May jobs miss shocker (100,000 below expectations).

If Yellen ever needed an excuse to hold rates steady for the next few FOMC meetings, this surely would suffice. But I hope she doesn’t use the excuse.

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