Meanwhile, Clarida was recently on a CNBC segment, stating that signs of slowing are beginning to materialize in the global economy. It isn’t just the comments themselves as some analysts are noting that the timing of the latest comments come just a month away from December’s interest rate announcement.
“The market is perceiving them as being more dovish…It’s a small pivot because they’re acknowledging the idea that when you get closer to the end of a hiking cycle you have to feel your way through. You want flexibility. It doesn’t mean they have to stop soon,” said George Goncalves, head of fixed income strategy at Nomura.
In an interview with the Wall Street Journal this month, Federal Reserve Bank of Philadelphia President Patrick Harker was outright convinced that a December rate hike is not the most optimal move given the latest rumblings in the markets.
“At this point, I’m not convinced a December rate move is the right move, but I need to watch the data over the next few weeks before determining whether it is prudent to boost the cost of borrowing again.”
Despite the latest comments from his colleagues and recent volatility roiling the capital markets, Clarida maintains that the economy is still robust.
“U.S. economic fundamentals are robust, as indicated by strong growth in gross domestic product and a job market that has been surprising on the upside for nearly two years,” Clarida said.
For more trends in fixed income, visit the Rising Rates Channel.