Fed Rate Hike in September Is 'More Likely Outcome,' Economist Says

While the minutes of the Federal Reserve's March meeting show some central bankers prefer a June rate hike, recent economic data might be too weak for hiking rates so soon, one economist said. "There was a little bit more emphasis [of a June rate hike] in the minutes," said Michelle Meyer, deputy head of U.S. economics at Bank of America Merrill Lynch (BA). "Now that we got that weak jobs report and the flow of data continues to come in pretty soft, expectations are probably shifting out; September seems like it's a more likely outcome."

New York Federal Reserve Chairman William Dudley told Reuters on Wednesday that a June liftoff was still "in-play." But Meyer doesn't think the current environment warrants higher rates. "I think the reason Fed officials are continuing to note that June is on the table is because they really want to reinforce this message to the market that the Fed has flexibility. There's no forward guidance. They don't have a dovish bias, but they have a neutral bias."

Source: The Street

Related Articles:
- Seeding A Forest Of Dividend Growth Stocks
- 7 Stocks With A Strong Cash To Dividend Coverage
- Optimizing Your Asset Allocation
- Dividend Growth Stocks Are My Conviction
- All Investing Involves Risk