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When can we expect the next Fed rate hike?

Although the U.S. can withstand more quarter-point nibbling by the Fed, the outside world cannot
  • The Federal Reserve met this week, and to no one’s surprise, it left alone the overnight cost of money.
  • However, to the surprise of most, it did nothing to “set the table” for a hike at its next meeting in June.

Long-term Treasury and mortgage rates are declining again. Not far, still hovering about 0.25 percent above the all-time lows, but certainly helpful to housing. Some of the reasons for the drop are traditional economics, but others remind how very strange this era is. The Federal Reserve met this week, and to no one’s surprise, it left alone the overnight cost of money. However, to the surprise of most, it did nothing to “set the table” for a hike at its next meeting in June. To the relief of all, quiet has descended on the incessant jabber from the Fed regional-bank presidents...almost as though someone has asked them to cork it. Chair Janet Yellen seems to get it: The incoming flow of U.S. data is poor in every respect, for years now continuously below Fed forecast. And, although the U.S. can withstand more quarter-point nibbling by the Fed, the outside world cannot. Next week, we get the usual first-week-of-month data load from April, the ISM indices and all-impor...