Fed Policymaker says CB Not Yet Decided on September Rate Hike

Federal Reserve policymakers have not yet decided whether to raise interest rates next month, an influential governor at the U.S. central bank said on Wednesday, appearing to push back on more hawkish comments the day before by a fellow U.S. official.

Fed Governor Jerome Powell said he and others on the policy-making Federal Open Market Committee will, between now and the closely watched Sept. 16-17 meeting, analyze data on the labor market in particular before making that decision.

“Nothing has been decided. I haven’t made any decisions about what I would support, and certainly the committee hasn’t,” Powell said on CNBC.

“The economy is moving along about as expected … the labor market continues to be strong,” he said. But “more recent data has been mixed,” including a weaker than expected reading of employment compensation in the second quarter.

The governor’s unusual appearance on morning television came a day after a newspaper quoted Dennis Lockhart, president of the Atlanta Fed, saying it would take “significant deterioration” in the U.S. economy for him to not want to begin tightening monetary policy in September.

Lockhart, a centrist and a voter on policy this year, said “there is a high bar right now to not acting” – comments that undercut Treasury bonds and lifted the dollar on Tuesday.

Powell, however, said: “I just wouldn’t want to speculate.” He noted two monthly jobs reports, including data on payrolls, earnings, and unemployment, will arrive before mid-September.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza