“Were the FOMC to delay the start of policy normalization for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting both of our goals,” Fed Chair Yellen told the Economic Club of Washington yesterday evening. “Such an abrupt tightening would risk disrupting financial markets and perhaps even inadvertently push the economy into recession.” So there you have it. Unless tomorrow’s Non-Farm Payrolls or other events seriously question the current US trajectory, the Fed is on course for lift-off in a fortnight. She was at pains to point out – yet again – that this rate cycle could be quite different; there is no pre-determined path; and that, in the end, it will be data dependent. Nothing too controversial from those caveats.
Recent Comments