- A positive outlook seems more political than realistic as the FED is out of maneuvering power.
- Keeping interest rates unchanged is the best and the only thing the FED can currently do.
- Low interest rates will weaken the dollar, boost exports and increase corporate earnings in the upcoming earnings season.
In FED’s Chairwoman Yellen semiannual policy report, the rhetoric has significantly changed since the last report in February. In short, the full employment target is almost reached but the inflation rate is still below the targeted 2% and the expectations for the reaching of that target have been changed from short term to medium term. Further, the latest job reports show a slowdown in jobs increases which creates a bit of a scare. The FED estimates the slowdown to be transitory. More →