During the Asian session yesterday we got a speech and a seemingly endless Q&A:
- More from Williams: Expect shallowest series of hikes in US history
- More from Fed's Williams: Low yields not just due to Fed policy
- Fed's Williams: Makes sense to raise rates sooner rather than later
After his words Jan Hatzius, chief economist at Goldman Sachs revised his expectation for a September Federal Reserve rate hike from 55% down to 40%. Says Hatzius:
- Williams "offered no new clues on whether the committee will be ready to act this month"
- "We had expected communication from key officials after the August employment report if indeed they planned to raise rates this month"
Goes on:
- The lack of guidance on the timing suggests the Federal Reserve is "not especially concerned" about the low pricing of a hike discounted by the markets
- Also cites the poor ISM result
- Hatzius bumped the chance of a December hike to 30% (from 25%)
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OK ... so Williams talks, Goldman Sachs listens. Or do I have the causation the wrong way round? Comments welcome!
