U.S. stock futures are poised to open slightly lower on Friday, the U.S. dollar index is trading higher, and with no major economic data released today and corporate earnings season winding down, traders are reacting to some earlier comments this week from influential U.S. central bankers about the likelihood of an upcoming interest rate hike at the end of 2016.
On Thursday John Williams, CEO and President of the Federal Reserve Bank of San Francisco, who is a voting member at the Federal Reserve, delivered a speech in Anchorage, Alaska where he explained on a macro level things are pretty good, the American economy is strong, and “we are pretty much at full employment.”
Fed President Williams said there’s no sign the Brexit vote in Britain on June 23rd will have enough of an impact to “knock our economy off course.”
He admitted it makes sense to get back to a pace of gradual rate increases, “preferably sooner than later.”
“We’re at full employment, and inflation is well within sight of, and on track to reach, our target. Under these conditions, it makes sense for the Fed to gradually move interest rates toward more normal levels” Williams said.
On August 16th William Dudley, CEO and President of the Federal Reserve Bank of New York and voting member at the Federal Reserve, gave an interview on Fox Business where he explained that an interest rate hike at the Federal Reserve’s next meeting in September is possible.
“We are edging closer towards the point in time where it will be appropriate to raise interest rates further” said N.Y. Fed President Dudley on Fox Business.
Economists and investors are eyeing possible rate increases at the Fed’s next meetings in September or else later in December when press conferences will follow interest rate decisions and economic projections will be updated by Committee members at the Federal Reserve.
Next Friday August 26th the 2nd estimate of 2nd quarter U.S. GDP will be released, the same day when the Jackson Hole Symposium will occur at Jackson Hole, Wyoming featuring a list of global central bankers.