With Yellen Cautious, Market Betting on July Rate Hike
Even though Fed Chair Janet Yellen indicated in a speech last Friday that she thinks an interest rate hike is in order as soon as June, investors are increasingly betting the next hike won’t be until July or September.
Greg Valliere of Horizon Investments wrote Tuesday:
Yellen now agrees with most of her colleagues that a rate hike is necessary this summer, but she’s so cautious — and so sensitive to global market concerns — that she may prefer to wait until after the June 23 Brexit vote in the U.K. Thus we think she will lay the groundwork for a rate hike at the June 14-15 FOMC meeting, so the markets will be fully prepared for a hike at the July 26-27 meeting.