In case you forgot, FED´s chairwoman Janet Yellen is testifying to some politicians who know nowt about economics in Capitol Hill today. She´s now answering questions after handing out her written testimonial.
Most of her comments are the same except that she raises a couple of issues about business investment and wage growth. She said that it´s not clear why investment has been weak and that it has been hurting productivity growth. If you see the productivity numbers, most of the time they miss the expectations, so she has a point there.
The next issue she raised was the wage growth. The pace of wage growth has been very poor in the US unlike in the UK, despite an ever-tightening labour market. The wages normally trail the jobs with a 6 month/1 year gap, but the US labour market has been strengthening for half a decade now, picking up pace as we go, while the pickup in wages has been way to slow. There´s something wrong here in my opinion.
These comments are slightly dovish which would send USD pairs lower, but the market doesn´t think so. EUR/USD is nearly 100 pips lower from the top today. Her written testimonial kept the same outlook as in November´s FED meeting, so rate hike odds for December are now up to 95%.