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It’s About Interest Rates

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The expectation of interest rates has been the key driver of the markets. The spotlight remains on rates and the Fed.  The markets moved after hawkish comments during Jackson Hole, however, the markets have reversed since NFP and ISM data releases. Central bankers will also be on the spotlight this week including ECB press conference and Fed speakers. Use the guide below to better prepare for potential market moving events.

Fed officials stands after Jackson Hole Economic Symposium:

Voting FOMC official View
Chairwoman Janet Yellen “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months.”
Vice Chairman Stanley Fischer Asked during an interview on CNBC if investors should be on the edge of their seats for a rate hike as soon as September and for more than one rate hike this year, Fed Vice Chairman Stanley Fischer replied: “I think what [Yellen] said today was consistent with answering yes to both your questions, but these are not things we know until we see the data.”
Gov. Lael Brainard Hasn’t spoken publicly since two strong jobs reports. Shortly after the May reading, she said, “there would appear to be an advantage to waiting until developments provide greater confidence.”
Gov. Jerome Powell “My view is, and has been, we should be on a program of gradual rate increases — we can afford to be patient,” Powell said in an interview with Bloomberg Television
Gov. Daniel Tarullo Speaks more frequently about bank regulation than interest-rate policy. “For some time now I thought it was the better course to wait to see more convincing evidence that inflation is moving toward and would remain around the 2% target,” Tarullo said at a July event.
New York Fed President William Dudley We’re edging closer towards the point in time where it will be appropriate, I think, to raise interest rates further,” Dudley said in an Aug. 16 interview on the Fox Business Network.
St. Louis Fed President James Bullard Bullard said he thought it would be best to raise interest rates after there had been some “good news about the economy.” While there have been two good jobs reports, “year-over-year GDP growth rate is very low,” he noted.
Kansas City Fed President Esther George “When I look at where we are with the job market, when I look at inflation and our forecast for that, I think it’s time to move,” George said in an interview on Bloomberg Radio.
Cleveland Fed President Loretta Mester I see a gradual upward pace in interest rates as being appropriate,” Mester said in an interview on CNBC on the sidelines of the Fed’s Jackson Hole retreat
Boston Fed President Eric Rosengren Rosengren is due to speak Wednesday. Rosengren said in early June “it is my expectation that economic conditions will continue to gradually improve, which in turn would justify further actions to normalize policy, continuing a gradual return to a more normal rate environment.”


Non-voting officials View
Chicago Fed President Charles Evans Due to speak Wednesday. “I do think that perhaps one rate increase could be appropriate this year,” Evans told reporters in early August during a media briefing at the Chicago Fed.
Philadelphia Fed President Patrick Harker I anticipate that it may be appropriate for up to two additional rate hikes this year,” with the funds rate target rate approaching 3% by the end of 2018, he said in July.
Dallas Fed President Robert Kaplan I do believe the case for removing accommodation is strengthening,” said Kaplan in an interview in Jackson Hole.
Minneapolis Fed President Neel Kashkari “When I look at the data, I don’t see much inflationary pressure, so we have the luxury of taking time to let the economy keep creating jobs,” Kashkari said in early August. “Everybody at the Fed wants the job market to keep healing and we would love to see more people getting back to work.”
Richmond Fed President Jeffrey Lacker Due to speak Friday, after the payrolls report. Told a meeting with activists on Thursday: “When are you going to raise interest rates so that senior citizens have enough income that they can get by?
Atlanta Fed President Dennis Lockhart Asked about possibility of two rate hikes in 2016, he told The Wall Street Journal: “The calendar would allow that, we have three more meetings. I wouldn’t take [Fischer’s] position today.”
San Francisco Fed President John Williams There is definitely a data stream that could come through in the next couple of months that I would think would be supportive of two rate increases,” Williams told reporters in late July.

Source: MarketWatch