发帖
雷达卡
ECONOMY CENTRAL BANKS
Fed Statement Could Offer Clues Toward June Rate Decision
Officials are unlikely to raise short-term rates this week, but economic assessment may hold hints for the summer
By DAVID HARRISON
April 25, 2016 5:30 a.m. ET
0 COMMENTS
Federal Reserve officials are unlikely to raise short-term interest rates at their meeting this week, but could drop hints about whether they might move at their next gathering in June.
Clues could lie in their assessment of whether the economy appears more likely to fare better or worse than their forecasts—the so-called balance of risks.
If their post-meeting statement Wednesday cites greater risks the economy will underperform, that would signal a reluctance to lift rates in June. On the other hand, if they see greater odds that the economy will do better than they expect, or if they say the risks are balanced, they might be more confident about considering a rate rise in June.
Fed Chairwoman Janet Yellen, in her most recent public remarks, on April 7, didn’t tip her hand on the issue. She said the U.S. economy is “on a solid course,” but added that “we’re suffering a drag from the global economy.”
The risk assessment is a closely watched feature of most Fed policy statements, but officials didn’t include it after their January and March meetings because they were split, according to minutes of those gatherings.
Minutes of the March meeting showed almost half of Fed officials saw greater risks the economy would grow more slowly than expected, while the rest saw the risks as balanced. More than half saw greater risks inflation would be slower than projected.
In December, by contrast, Fed officials held a sunnier view of the economy. Just three of 17 officials at the time saw the risks weighted toward weaker economic growth and seven saw greater risks to their inflation forecast.
The central bank raised its benchmark short-term rate by a quarter of a percentage point in December and penciled in four more quarter-point increases this year. But after months of slowing global economic growth and unsteady markets, Fed officials in March scaled back those expectations, projecting they would lift the rate by just two quarter-points by year’s end.
Financial conditions have improved in the six weeks since the March meeting. The S&P 500 index closed Friday 3.2% above where it was March 16, when the Fed’s policy committee last met. The gap in yields between corporate bonds and Treasury notes has come down since February, a sign that investors are more willing to take on corporate debt. And a Goldman Sachs index reveals that financial conditions are easier than they have been at any point since last August.
The dollar has weakened since January, which should ease pressures on U.S. exporters. Meanwhile, the U.S. labor market remains strong, with employers adding an average 209,000 jobs a month so far in 2016 and unemployment at 5% in March.
However, economic growth appeared sluggish at the start of the year. Atlanta Fed economists estimate the economy grew at a 0.3% annual rate in the first quarter and inflation remains short of the Fed’s 2% target.
The International Monetary Fund this month lowered its forecast for 2016 global economic growth to 3.2% from its previous projection of 3.4%. Markets and economists are also worrying about the outcome of a June 23 U.K. vote on whether to leave the European Union. A vote to leave could destabilize markets and economies world-wide.
Some Fed officials point to the positive developments as a sign of U.S. resilience and lower risks, which could prompt higher interest rates in June.
Richmond Fed President Jeffrey Lacker in an April 12 speech argued in favor of raising rates four times this year. “Given the extent to which global risks to the United States have subsided, prudence suggests staying the course with a gradual sequence of rate increases,” he said.
Most economists surveyed by The Wall Street Journal this month predicted the Fed will keep rates steady in April but raise them in June. Markets are more dour, putting the odds that the Fed will hold off again in June at around 80%.
That led Boston Fed President Eric Rosengren to warn this month that investors are underestimating how much the central bank is likely to raise rates in coming years.
Other officials, however, are still worried about the risks from the volatile world economy and suggest it might be best to hold rates steady for a while.
Atlanta Fed President Dennis Lockhart, a centrist among Fed officials, said April 14 he was leaning against a rate increase this month and suggested there were reasons for holding off in June. “I am less likely, knowing what I know today, less likely to be strongly in favor of a rate move,” he said.
Philadelphia Fed chief Patrick Harker told an audience April 12, “It might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike.”
The lack of a unified signal has left economists with conflicting forecasts.
Goldman Sachs economists Zach Pandl and Jan Hatzius, in a note to clients, predicted this week’s Fed statement will signal risks to the U.S. economy have eased, perhaps paving the way to a June rate increase. J.P. Morgan’s Michael Feroli, however, expects the Fed will once again hold off on including a clear assessment of risks and will offer no hints about a June rate increase.
京公网安备 11010802022788号
