Today’s release of July’s Fed Minutes and recent statements by influential Fed officials (Lockhart and Dudley) show some sentiment for a rate hike at the next meeting (September). These officials feel that even though inflation is not at the Fed target of 2%, the economy is nearing “full employment” (which itself is a historic anomaly, chalk it up to the “new normal”). Others want to wait and see more data – perhaps a strong 3rd Quarter GDP which is anticipated. There is also some worry that the unprecedented long period of ultra-low rates is causing excessive risk taking. However, the futures market has low probabilities for any rate increase before December. Stay tuned.
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