Fed: Door for action remains open but no urgency to move in September - RBS

Research Team at RBS, suggests that the Fed’s blackout period begins Tuesday, September 13 (and ends September 22) and the final Fed speaker ahead of the upcoming FOMC meeting was Fed Governor Brainard.

Key Quotes

“In her September 12 speech, Brainard continued to suggest no urgency in raising rates. Nor do we expect upcoming economic reports due later this week to signal the need for action. We look for lackluster results on retail sales and industrial production, while the price indices (both PPI and CPI) are expected to show that upward progress on inflation has stalled.

A realization of our expectation, along with earlier-reported data on the labor market, ISMs, core PCE deflator, and auto sales would not meet the two criteria for further rate hikes laid out in the July FOMC minutes: namely, the results did not increase confidence that (1) inflation is moving closer to 2% on a sustained basis and (2) economic growth is strong enough to withstand a possible downward shock to demand.

Thus, we believe the Fed will wait for more information before concluding that a further rate hike is warranted. While a move in December remains possible, that meeting is a long four months away. At this time, we continue to assign no better than even odds that the Fed hikes interest rates this year.”