Will Yellen leave a Dec rate hike on the table at tomorrow's Jackson Hole? - Nomura
|Analysts at Nomura explained that given the focus on “Financial Stability” they do not expect Yellen to focus on the economy and the immediate outlook for monetary policy.
Key Quotes:
"We do not expect her to say much about the ongoing debate over inflation. That said, one comment in the minutes suggests that Yellen will argue that concerns about systemic risk may have to be a factor in future interest rate decisions. The minutes reported:
“One participant stressed that the risks both to the Committee’s inflation objective and to financial stability would require careful monitoring. This participant expressed the view that a gradual approach to removing policy accommodation would likely strike the appropriate balance between promoting the Committee’s inflation and full employment objectives and mitigating financial stability concerns.”
If Yellen makes this point in her Jackson Hole speech, we think that reinforces the likelihood that the FOMC will raise rates again at their meeting on December."
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