Recent turmoil in the financial market along with drop in inflation has seriously pushed back expectations of a rate hike from FED as early as September.
Here is why some analysts and economists think that it is unlikely in September
- Whereas Federal Reserve policy officials are optimistic on growth and confident over US labor market, concern lies with low inflation and latest minutes suggest that FED is quite divided over - where inflation might be headed.
- New York FED president, Bill Dudley just provided a hint last night that rate hike in September isn't looking compelling as of now. Which has pushed back implied hike expectation to just about 25%.
- Analysts at Commerzbank think, if FED was to hike rates in September, it would have started providing hints by now.
With rate hike expectation pulling back to December, a hike in next meeting would be very surprising and positive for Dollar.
Watch out for latest comments from FED officials at Jackson Hole meeting.


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