Why Is The Fed So Desperate To Hike?
Yellen’s speech today in Jackson Hole shows a Fed that appears desperate to hike rates. Why?
Here are the last four quarters of GDP.
- 3rd Quarter 2015: 2.0%
- 4th Quarter 2015: 0.9%
- 1st Quarter 2016: 0.8%
- 2nd Quarter 2016: 1.1%
It’s highly unlikely the Fed believes 1% is the new normal for robust growth. So why is it so desperate to hike rates?
Top Reason Fed Wants To Hike
— Mike Shedlock (@MishGEA) August 25, 2016
1. Asset bubble worry
2. Strong jobs inflation
3. So it can cut later
4. Fed clueless
No Confidence
Despite wanting the hike, a Yellen slide from the Jackson Hole symposium shows the Fed has little confidence that it will hike.
For details please see Yellen Discusses “Tools”: She’s 70% Confident That Rates will Be between 0 and 4.5% in 2018.
Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment ...
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