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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (14246)	9/9/2015 8:07:16 AM
From: Goose94	Read Replies (1) \| Respond to of 203325

Central Bank Doves Have Slight Advantage In FOMC Meeting Next Week - TDS There is only one more week before the much anticipated Federal Open Market Committee meeting and, according to one bank, it could be a fairly close vote with a slight edge given to the dovish members of the committee. In a research note published Monday, analysts at TD Securities said that based on their assessment of recent comments from committee members, there is a greater chance the Fed passes on raising interest rates in September; however, the bank added that with every meeting being “live” there is still a chance the Fed hikes rates in October or December. According to TDS calculations, they see five members voting to delay the rate hikes, three in favor of a September move, while Fed Chair Janet Yellen and vice-chair Stanley Fischer sit on the fence. “Granted, this assessment is highly subjective and the ultimate outcome will be dependent on Yellen’s position (which we assumed may be leaning towards a post-September liftoff) and her ability to drive the consensus view in that direction,” they said in the report. At the top of the list in the dovish camp of those expected to vote for a delay are New York Fed president William Dudley and Atlanta Fed president Dennis Lockhart, who have shifted their position away from a September hike, said the analysts. “In his remarks on August 26, Dudley indicated that a decision to begin the process of policy tightening at the September meeting is ‘less compelling.’ This is in contrast to his remarks on August 16 when he indicated that he was hopeful for a liftoff in rates in the ‘near future,’ said TDS report said. “In a subtle shift in his previous remarks, President Lockhart indicated on August 24 that the recent developments in China, the appreciation of the dollar and further declines in oil prices ‘are complicating factors’ in assessing the outlook for growth. Though he continues to believe that the economy has made sufficient progress to justify rate hikes ‘this year.’ However, this is a noticeable move away from his position on August 4 when he indicated that September could be an ‘appropriate time’ to raise rates,” the report added. Other voting members, governors Lael Brainard, and Daniel Tarullo and Chicago Fed president Charles Evans, have not made any comments since before July but are believed to favor a delay in rate hikes, with Evans suggesting the central bank hold steady until 2016. Although there are six Fed committee members who are known hawks, only three are voting members this year, and one of those could be considered neutral. Those who are expected to favor a rate hike include San Francisco Fed president John Williams and Richmond Fed president Jeffrey Lacker. “In his most recent remarks [Williams] stated that ‘all of the data that we have had up until now has been encouraging. It …has been about as good, or better, than I was expecting, in terms of the U.S. economy.’ However, in a noticeable shift from his earlier position he expressed concern that ‘there are some pretty significant -- and I would say have now grown larger -- headwinds that have developed.’ This suggests that he may be backpedalling a bit on his earlier hawkish views toward a September hike,” the analysts said. “As a well-known hawk, Lacker has been a vocal proponent for tightening by the Fed. In his most recent remarks, he noted that the exceptionally low rates are no longer warranted and it is time to align monetary policy with the economy,” the report added. The last voting member -- Jerome Powell -- is seen as a neutral member with his most recent comments made in early June, which he said there was a 50% chance of a September rate hike, the analysts said. Another mystery on the committee is the second in command, Fischer, who TDS said was fairly neutral in his recent speech at the central banker symposium in Jackson Hole. “In effect, Fischer remained non-committal on September, though he indicated that the case for a September hike was ‘pretty strong’ but ‘not a conclusion yet,’” the report said. Finally the biggest enigma in the rate hike guessing game is with Yellen herself; TDS noted that the Fed Chair has not made any statements since mid-July. “At that time, she indicated that it will be ’appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.’ She also identified herself with the ‘central tendency of the projections’ which indicated a preference for two hikes this year. Whether or not this is consistent with a September hike, or her view has changed then, is still unclear,” the analysts said. “We suspect that she is likely to lean in the direction of taking a pass on a September liftoff as the Fed awaits further clarity on the economic outlook from the data.” By Neils Christensen