Squawk / 28 May 2016 at 22:11 GMT
Managing Director / Technical Research Limited
New Zealand
You don’t need a weatherman to know which way the wind blows.

That was the message from Fed Chair Janet Yellen in her Q&A session on Friday. Rate hikes are coming; be patient and prepare.

We will get a more detailed idea of timing when Yellen gives a prepared speech on the economy June 6. By then the key employment data for May will have been released and she will have a good idea of what her FOMC colleagues are thinking. But also important will be Tuesdays inflation update. Markets will be looking for the price index of Personal Consumption Expenditures (PCE) – the Fed’s benchmark – to start following the CPI number up the the 2% target.

See chart below
29 May
Jim Earls Jim Earls
Are you watching the yields on 1 to 6 month U.S. T-Bills? They are lower today than they were in December of 2015, before the Federal Reserve's initial first hike. Certainly not a ringing endorsement for further coming increases in the rates under the Federal Reserve's purview.
29 May
Max McKegg Max McKegg
Fair comment Jim. Personally I watch the 2 year T Bond chart as the best indicator of what the market thinks the Fed is up to. Also the CME fed funds futures which effectively give us the “odds” of rate hikes. On that basis the chance of a move on Jun 15 are only one-in-three so perhaps your T Bill guide is correct.


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