As we enter March, market participants are already looking ahead to the Federal Reserve’s (Fed) next Federal Open Market Committee (FOMC) meeting. While the meeting isn’t until March 15 – 16, 2016, markets are already trying to decipher how the widening disconnect between what the Fed plans to do with the fed funds rate and what the market thinks the Fed will do will be resolved.
The latest Beige Book suggests that the U.S. economy is still growing near its long term trend, but that the drag from a stronger dollar and weaker energy prices, along with the slowdown in emerging market (EM) economies — most notably China, are still having a major impact on the manufacturing sector.
Federal Reserve (Fed) policymakers face a difficult task this week. Although it is not expected that they will raise rates again as soon as this week’s meeting, they have to communicate the Fed’s policy intentions without the benefit of a press conference by Fed Chair Janet Yellen or a new set of economic and rate forecasts from the members of the Federal Open Market Committee (FOMC).
As we noted in our Outlook 2016: Embrace the Routine publication, the start of a new Federal Reserve (Fed) rate hike cycle may grab investors’ attention, … Read More!