After leaving interest rates at a record low for an extended period of time, hawkish momentum from the Open Market Committee continues to gain as evidenced by the latest slew of policy speeches from key officials.
Referencing economic activity, Federal Reserve Chair Janet Yellen remarked that, “short-term, I would say I don’t think there are serious obstacles.” Echoing her remarks was Dallas Fed President Robert Kaplan who indicated that the biggest disagreement raging amongst members of the FOMC was the pace at which rates should be raised. Adding to the possibility of further tightening was Philadelphia Fed President Patrick Harker who indicated that the focus could be on unwinding the massive balance sheet once rates reach 1.00%.
In the meantime, Dow futures remain shy of the 20,000 level, retreating steeply on Thursday before rebounding modestly during the American cash equity session.
Fed Contemplating Tapering
Daily Analysis - 13/01/2017