Breaking News From The FED: Is The September Rate Hike Off Of The Table?

Posted Wednesday, September 6, 2017 by
Shain Vernier • 1 min read

There is breaking news hitting the wires out of the FOMC. The FED Vice Chairman Stanley Fischer has submitted his resignation effective October 13, 2017. Fischer has acted as the FED’s Vice Chair for the past 3 years and has been a mainstay on the global financial scene for the last 30.

Wall SrteetThe FOMC Always Keeps It Interesting!

These types of items do not necessarily move markets, but the timing is curious. Fischer’s term is due to expire in February as is Chairperson Yellen’s. Why not just play out the term? Why the sudden rush to retirement?

Aside from Fischer himself, no one really knows the answer. However, it is our job as traders to try and account for as many contingencies as possible.


Tuesday’s FED Comments

FED governor Lael Brainard hit the stage yesterday and had a few surprises up her sleeve. She alluded to the fact that the U.S. inflation target of 2% has not yet seen pressure and may be another miscalculation.

The overtones of her comments were echoed by Minneapolis FED President Neel Kashkari. Kashkari stated that recent rate hikes may be doing “real harm” to the U.S. economy.

These are interesting sentiments, as a rate hike later this month was seen as a foregone conclusion. Now, with Fischer’s coming departure from the FED, we may be looking at a much more complex situation.

Overview: Trading the actions of Central Banks can be a challenging business. As we saw earlier today with the Bank of Canada’s surprise rate hike, it can be difficult to account for the improbable.

Staying abreast of the ever-evolving news cycle is an important part of successfully managing risk and preserving the bottom line.

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