Research Team at Rabobank, suggests that with anti-Fed protests taking place on the sidelines of Jackson Hole, it is critical that Yellen’s speech today is clear and speaks to the man in the street; such that it inspires confidence.
Key Quotes
“After all, how will the Jackson Hole Symposium which is entitled “Designing Resilient Monetary Policy Frameworks for the Future” explain that four rate hikes were considered possible in December 2015 for the year ahead? Despite low unemployment, rapid payrolls growth, core CPI of 2.3% y-o-y, stabilization in China, Brexit not proving a catastrophe and the all-important S&P at a record high, here we are approaching autumn 2016 with nary a rate-hike in sight this year and only a 53.9% chance of a move priced in by year-end? Will it tell us why last December’s framework was so utterly wrong, and if so where and how?
Notably, the bond market has long been telling us the Fed is “All jaw jaw and no war war”; USD has recently followed that lead; and US equities rallied at the cue “All…” without even waiting to hear the rest of the sentence. Are any of those outcomes that the Fed doesn’t want to see in its heart of hearts?”
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