A camel is a horse designed by committee.
The members of the Fed’s policy-setting Federal Open Markets Committee (FOMC) have called the decision to keep the base rate unchanged as being “data-dependent.” Various Committee members expressed their own unique take on what "data dependent" means…
In other words, the Fed’s communication strategy is a mess, and cleaning it up is far more important than the exact timing of the FOMC’s decision to exit near-zero interest rates. After all, even after the Fed does finally make the “gigantic” leap from an effective federal funds rate of 0.13% (where it is now) to 0.25% (where is likely headed soon), the market will still want to know what the strategy is after that.
- Kenneth Rogoff, Professor of Economics
One of the few recent bright spots in China’s economy has been the recovery in housing sales. Unfortunately, a number of indicators show that recovery losing steam: gains in sales and prices will slow in coming months. This turn in the cycle reinforces our view that construction activity will be weak in 2016. The overall Chinese economy continues to slow and more rate cuts will come, says Rosealea Yao, Gevakal/Dragonomics.com
The last statement from Yellin and the Fed delayed any rate increase in part due to China uncertainty.
This might turn out to be the biggest non hike next hike from the US Fed. Stay tuned.