Forex Marketz Daily Forex News – Fully Markets Update
The one thing we have to hand to the Federal Reserve (Fed) is its ability to muddy the waters and confuse investors and analysts. We can never get a handle on what Janet Yellen and Company are about to do.
Sometimes, one has to wonder if they know what they are going to do.
Recently, Janet Yellen, chair of the Fed, testified before Congress. Once again she used rather opaque language to indicate that members needed to take a better assessment of the risks involved with raising rates and normalization of policy. This is leading many to believe that they will keep rates super low for longer than anticipated. Yellen used the word patient a lot to convey the Fed will keep rates stable till data supports a move.
Richmond Federal Reserve President, Jeffrey Lacker, in a recent Reuter’s interview, said the Fed can raise rates even if inflation remains low and below the Fed’s target of two percent. He wants the Fed to hike rates in June. His reasoning is that the labor market is improving nicely. He also feels that the fall in prices and inflation is thanks to the selloff on crude oil. Gasoline prices at the pump have also not helped inflation as those are lower than expected right now.
Lacker said that if the Fed is confident “that they [oil prices] are transitory” then inflation will remain stable. If this happens then “we can chug along” and take the volatility in crude prices “in stride.” Lacker made these comments to Reuters business progrom on SiriusXM (SIRI: Nasdaq) satellite radio.
