ISM Associates: Jackson Hole Eyed For Direction On US Rate Hike

ISM Associates: Attention turns to annual Jackson Hole Symposium for clues on rate hikes.
ISM Associates: With Federal Reserve Chair, Janet Yellen, due to give a speech at the annual Jackson Hole, Wyoming symposium, most investors will be looking for a positive assessment of the economy that could give clues as to when the US central bank will finally raise interest rates by 25 basis points.
Federal Reserve "jawboning" has returned with a vengeance in recent weeks with senior officials like William Dudley, President of the New York Federal Reserve and Stanley Fischer, Fed Vice-Chairman both doing their utmost to project hawkishness ahead of an FOMC meeting that is not due to take place for another month.
"We think this new round of Fedspeak is part of a holding pattern until the US presidential election is over. There is what seems to be leaning towards a de-emphasis on the robustness of job creation in the US. They've reached the point where one aspect of their dual mandate - full employment - has been fulfilled. There seems to be more talk about inflation falling short of the Fed's 2% target and we think they'll be using this to hold off pulling the trigger," said James Preston, Chief Economist at ISM Associates
Economic data from the US has been mixed of late with the brightest spot being strong job creation numbers. The contribution from industrial production, durable goods and retail spending has been more subdued in recent months.
ISM Associates says it sees no move on US interest rates until December or 2017 citing challenges from the global economy and sluggish growth at home.