Friday, May 26, 2017

Fed Minutes Increasing Prob of June Rate Hike

Yesterday's Fed minutes indicated that that most official believe the a healthy economic backdrop warrants higher interest rates. They used the word "soon", which the markets translated as an interest rate hike in June. This interpretation somewhat contradicts Economic Activity Composite's message of economic deterioration within an uptick.

The Fed clearly realizes that interest rates must go higher to ease the strain on America's public pensions.

Headline: The Fed says it'll be appropriate to raise interest rates again 'soon'

The Federal Reserve is set to continue raising interest rates, with most officials seeing further tightening as appropriate "soon," minutes of its May meeting published Wednesday showed.

As expected, the Federal Open Market Committee left its benchmark interest rate unchanged in May, and markets anticipate that it would hike again at the June meeting. CME's FedWatch Tool reflects an 83.1% probability that the FOMC will increase the target rate to a range of 1% to 1.25%.



Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.