Rick Reider is BlackRock’s Chief Investment Officer of Fundamental Fixed Income, Co-head of Americas Fixed Income and a member of the company’s Global Operating Committee. He says:
- Yellen’s Jackson Hole comments, along with the recently released Fed minutes, clearly show we’re at the beginning of a very significant period of transition for Fed monetary policy
- Fed is clearly angling toward more near-term policy normalization
He asks “When will the Fed begin to raise rates?”:
- If the August payroll report shows continued labor market improvement, watch for a policy transition announcement at the Fed’s September meeting
- A September transition announcement could lead to rate normalization beginning as early as March
- After lift-off, the Fed will likely normalize rates slowly until we reach a federal funds rate closer to 3%
… we’re at the beginning of a sooner-than-expected, and very significant, period of transition for Fed monetary policy, and given today’s slow economic growth, the path toward normalizing rates is likely to involve a slower pace and a well-defined lower rate destination than past exits.
More at (ungated): The Rate Rise Timeline to Watch for Now
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BlackRock U.S.-headquartered multinational investment management corporation based in New York City with $4.59 trillion in assets under management
