- Fed must prepare markets for fact that rates may begin to rise sooner than previously expected
- Does not suggest rate rise now but need more flexibility
- Says rates should rise in very near future
- Warns against repeat of past Fed ‘stop and go’ policy
- Expects 3% growth this and next year before hitting 2.4% trend
- Says adjusting FOMC language is an appropriate first step
Super hawk Charles Plosser give the buck a little lift to 105.90 from 105.80. He hasn’t commented on the current volatility in markets as these were prepared comments.
For all the very candid and friendly discussion we have on site over rate hikes, the fact is that both the doves and the hawks acknowledge that rates are going up. That should be the single most important part of the rate trade. To a certain extent the ‘when’ doesn’t matter. What matters is that the Fed and the BOE want rates up and they will pull out all the stops and use every minor excuse to make it happen.
