Interest Rate Increases on Pause Until September

June is upon us…… Remember, June 2015 was the likely “liftoff date” for the Fed to raise interest rates. The consensus is that the Fed keeps hitting the snooze button on rising interest rates. Investors can sleep well as the new consensus is September. In economic news, this week’s durable goods report (aka core capex) showed a 1.0% increase after excluding the volatile aircraft sector. This is one of the first major glimpses of the “spring thaw”, as the US emerges from the cold winter and port shutdown. This week’s buzzword is “mismeasurement.” A major bank research note recently indicated that the traditional economic data measurement and report methods may understate the productivity and inherent inflationary aspects of rapidly changing technology. Some Fed presidents are touting “GDP Plus”, which tracks incomes Americans earn from the output of goods/services, not just the output itself. This could speed up rate increases and give hawks cover… stay tuned… David R. Pascale, Jr.