ibusinesslines.com March 24, 2017

Economic Watch: Rising Factory Orders Latest Indicator of Interest Rate Hike

20 March 2017, 05:14 | Kelvin Horton

5 Bank Stocks to Buy as Fed Hints at a Rate Hike in March

Federal Reserve Chair Janet Yellen prepares to speak before a Senate Banking Housing and Urban Affairs Committee hearing on the “Semiannual Monetary Policy Report to the Congress” on Capitol Hill in Washington U.S

Interest-rate futures, in the meantime, suggest that markets now expect the Fed to raise rates 2.5 times this year, moving closer to the Fed's projections of three increases.

"What the Fed has to worry about is that if they hike in March, they also have to communicate to the market that this is not just a hike-every-quarter type of thing, kind of a hike cycle like we saw during the Greenspan era", Peters told Business Insider in a recent interview. Of the 27 rises in interest rates of a quarter of a percentage point since 1991 only three occurred with a market probability forecast of less than 60 percent a month beforehand, research from US bank, Wells Fargo, research showed.

A series of previously scheduled speeches by Fed officials, as well at least two television interviews without prepared remarks, gave the Federal Reserve the platform it needed to alert markets before the traditional "black out" period went into effect ahead of the March 14-15 meeting.

Dudley gave markets an initial jolt when he said in a television interview that "animal spirits had been unleashed".

Thomas Simons, an economist at Jefferies, said he was heartened by the Fed's campaign.

It's a welcome move as she wanted to get rates off the ground throughout her three-year tenure.

Just a few weeks ago, on February 14, U.S. If the inflation keeps up, it is looking increasingly likely that the Fed would deliver on its promise. US consumers are the most confident in the USA economy in 15 years, according to the Conference Board.

Q: Why are we seeing a likely interest rate increase now?

Many have speculated in the past that what it means for the stock markets, real estate or even the real economy for the Fed to hike rates faster.

The minutes of the Fed's January 31-Feb. "He added that "if there has been a conscious effort" to boost expectations of a rate rise, I'm about to join it". "Unfortunately their biggest fear is now coming to life". Friday's jobs report is not expected to deter the Fed from raising rates next week.

She concluded that amid "still-tepid economic data suggesting little additional momentum in the underlying economy, Federal Reserve officials continue to issue warnings to the market that a near-term adjustment in policy is imminent, while noting the market has been disappointed before after buying into individual Fed members' comments".

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