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Tuesday 6 December 2016

'Murky' data complicates Fed's rate move

Howard Schneider

Published 17/04/2015 | 02:30

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

A "murky" run of first-quarter data highlighted by a weak March employment report and an oil-driven downturn in investment is masking the US economy's underlying strength and complicating the Federal Reserve's interest rate plans, Atlanta Federal Reserve Bank President Dennis Lockhart said yesterday.

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The Fed's decision on when to raise rates, Mr Lockhart said, may come down to waiting longer in hopes of more convincing proof of the economy's strength, or pushing through an earlier increase but moving slowly from then on.

The US central bank has said it will consider rate hikes on a meeting-by-meeting basis, beginning in June, though investors and many economists don't expect an increase until at least September.

"Ideally, I'd like to see direct, affirmative evidence in the data that the desired outcomes are in fact materialising," Mr Lockhart said, adding that a more solid footing for the initial rate hike could allow a more predictable path for further increases.

Irish Independent

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