Tag Archive: expectations

Was the Fed More Dovish Than Expected?

Last week, the FOMC meeting took place over Tuesday and Wednesday with the central bank’s decision to raise the Fed Funds rate by a quarter point being announced at the meeting’s conclusion. The decision to hike rates came as no surprise. The Fed had taken steps to inform markets that a rate hike was not only possible but likely coming several weeks ago. Clearly, the Fed did not want to upset financial markets by catching investors off-guard with an unexpected rate hike. The Fed did... Continue Reading

Latest Fed Minutes Most Hawkish In Years-Or Are They?

Last week, investors got the latest release of the FOMC meeting minutes. Although at first glance the minutes appeared to be considerably more hawkish, the central bank did also cite some risk it sees in the New Year. While it can also be a matter of interpretation to a degree, upon a closer examination of the minutes the Fed still seems rather cautious. The central bank voted to raise rates last month for just the second time in a decade, and while the Fed now... Continue Reading

Rate Hike Boo-Hoo

Talk of another rate hike by the Federal Reserve has largely dominated the financial media for some time now, and recent hawkish commentary from several Fed officials has markets on edge. The Fed will meet again on September 21st, and investors will be paying close attention. For now, Fed Funds futures are pricing in about a 24 percent chance of a hike this month, while those same contracts are currently predicting a 58 percent chance of a hike in December. The real question is: Does... Continue Reading

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Jobs Data Disappoints

Last Friday, the U.S. Department of Labor released its Employment Situation report for the month of August. According to the report, the U.S. added 151,000 jobs in August, well below consensus estimates of 175,000 jobs. The unemployment rate held steady at 4.9 percent. While the addition of 151,000 jobs might sound pretty solid when taken at face value, the number was a clear miss and may drive a shift in interest rate expectations. The week before last, the rhetoric coming out of the Fed symposium... Continue Reading

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A Lurking Danger

It seems that the pace and timing of additional interest rate hikes by the Federal Reserve has largely dominated financial headlines in recent months. While the general consensus seems to be that the pace of further hikes will be very slow and incremental, we’d like to present an alternative possibility that seemingly few investors are considering. What if inflation expectations were to pick up rapidly? What if in the coming quarters, inflation were to accelerate at a pace significantly faster than the Fed’s two percent... Continue Reading