US: A strengthening case for Fed rate hike – ANZ

Research Team at ANZ, suggests that the Yellen’s recent remarks has strengthened the case for Fed rate hike.

Key Quotes

“Perhaps her comments were a little more caveated, and did need to be reinforced by Vice Chair Fischer in a subsequent media interview, but Fed Chair Yellen has joined a number of her colleagues by noting that “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months”.

The market has reacted accordingly, although doesn’t appear to be pushing the theme too far just yet and we suppose that seems fair given we have been in this position before, only for the Fed to get cold feet. With Yellen reiterating that all decisions remain data-dependent, this week’s payrolls report takes on plenty of importance.”