Tatler-Cox: December Could Be A 'No-Go' For Fed

Tatler-Cox: Investors should not bet on the Federal Reserve being able to hike in December.
Tatler Cox: Investors banking on an increase in US interest rates in December could be set for disappointment says investment house, Tatler-Cox.
General consensus in the market is that the US Federal Reserve will opt to leave monetary policy unchanged at its highly-anticipated meeting which concludes today and odds of a hike in December are at 80%. Strategists at Tatler-Cox, however, say that much can change between now and December.
"The run of poor economic data from the US economy could continue well into next year and, if it does, rate hike expectations could change very quickly," says Mayla Yakumi, the firm's chief investment officer.
"Last month's poor jobs report, disappointing news on retail sales and a decline in industrial production not mention poor housing start numbers will almost certainly see the Fed hold off this month but the lackluster data could easily continue into December at which point we'd expect rate hikes to be taken off the table."
The Federal Reserve has spent much of 2016 sending mixed signals to a market which has responded by appearing to be unprepared for an increase in the cost of borrowing. Hawkish rhetoric from various Fed officials has been met with skepticism and incredulity by investors who, according to Yakumi, "have grown weary of the Fed's 'Cry Wolf' method of managing expectations".
Tatler-Cox says that challenges facing the global economy including the as-yet-to-be-realized fallout from the UK's decision to leave the European Union will also figure in the Fed's deliberations this month and in December.