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Yellen reinforced December lift-off possibility – Deutsche Bank

FXStreet (Delhi) – Research Team at Deutsche Bank, note that the Fed Chair said that ‘at the moment what we see is a domestic economy that is pretty strong and growing at a solid pace, offset by some weakening spilling over to us from the global economy’.

Key Quotes

“She went on to say that ‘what the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labour market and to return inflation to our 2% target over the medium term’. Reinforcing the hawkish tone from the FOMC, this led Yellen to suggest that ‘if the incoming information supports that expectation then our statement indicates that December would be a live possibility’.”

“Those comments were then backed up at the end of the US session by NY Fed President Dudley who said that he fully agrees with the view of Yellen that December is a live possibility, but also wanted to ‘see what the data shows’ and that he would ‘probably want to see a little bit more in terms of wage inflation’. Earlier in the day Fed Governor Brainard had said that the domestic outlook is encouraging, while on inflation noted that survey measures of expectations have been reassuring for the most part but that some market-based measures have dipped lower.”

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