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3 Jul 2015
Fed: A September liftoff still in play - Nomura
FXStreet (Bali) - Nomura still thinks that September is slightly more likely than December for the timing of the Fed's liftoff.
Key Quotes
"Overall, this week’s data remained consistent with our outlook. Growth is on a better trajectory after slowing in Q1. Labor markets are moving closer to full employment. Our Q2 tracking estimate ended the week at 2.7%, slightly below last week’s reading of 2.8%, but still signaling a solid rebound after the Q1 slowdown."
"All this suggests that a September liftoff of the federal funds rate is still in play. Wage growth has decelerated to a degree and this will surely be of some concern for FOMC participants. But the Fed has indicated that it doesn’t necessarily need to see a pickup in wage growth to begin policy normalization."
"As such, the absence of any acceleration in the BLS’ average hourly earnings might not materially affect the Fed’s policy plans. We still believe it is a close call between September (40%) and December (35%), but we think that September is slightly more likely than December for the timing of liftoff."
Key Quotes
"Overall, this week’s data remained consistent with our outlook. Growth is on a better trajectory after slowing in Q1. Labor markets are moving closer to full employment. Our Q2 tracking estimate ended the week at 2.7%, slightly below last week’s reading of 2.8%, but still signaling a solid rebound after the Q1 slowdown."
"All this suggests that a September liftoff of the federal funds rate is still in play. Wage growth has decelerated to a degree and this will surely be of some concern for FOMC participants. But the Fed has indicated that it doesn’t necessarily need to see a pickup in wage growth to begin policy normalization."
"As such, the absence of any acceleration in the BLS’ average hourly earnings might not materially affect the Fed’s policy plans. We still believe it is a close call between September (40%) and December (35%), but we think that September is slightly more likely than December for the timing of liftoff."