InternationalMarkets & Economy

Rates rise late after Yellen speech

The Jackson Hole, Wyoming, event caused just a small wave
  • Unless some pressing need arises here in the U.S. -- higher actual inflation and/or a surge in wages -- the Fed will stay steady.

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Credit markets sat immobilized in August, waiting for Janet Yellen’s speech this morning at the annual Economic Policy Symposium in Jackson Hole, Wyoming. This conference of central bankers has been sponsored by the Kansas City Fed since 1978 -- so very appropriate this morning because the K.C. Fed never does anything useful (for the last 25 years demanding large rate increases to fight imaginary inflation). Jackson Hole is gorgeous, and it’s easy to imagine central bankers in pinstripes singing around the campfire -- old, sad songs about wrecking economies. The conference has no tradition of speeches announcing major policy change, and today was no exception. Yellen delivered one allegedly hawkish line -- “...I believe the case for an increase in the federal funds rate has strengthened in recent months” -- but did not suggest she intends to do anything about it. Fedwatchers insist that she put September back in play. Not likely, not during this election. Unless so...