Yellen sets a low bar for one hike
In her press conference, Janet Yellen said that so long as job gains continue in the next few months and there are no shocks, then a hike is December is coming. That's a low bar and reflects the eagerness to ratchet up rates.
Beyond that, what was striking about the Fed and Yellen was the negativity in the longer-term. The growth and inflation forecasts were ramped down. They see just 1.8% growth this year, 2.0% in 2017 and 1.8% in the longer run. On inflation, they no longer see a return to 2.0% PCE inflation until 2018 (rather than 2017).
The US dollar is near the worst levels of the day on all fronts and already there against the commodity currencies.
I'm skeptical that dollar selling will last. These gains in the stock market may pull in some inflows.
