Mixed messages as Fed officials go public in force

Mon Sep 28, 2015 7:31pm EDT
 
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By Jonathan Spicer and Ann Saphir

MILWAUKEE/LOS ANGELES (Reuters) - A flurry of planned appearances this week by Federal Reserve officials began on Monday, but conflicting views

by policymakers raised more questions about the U.S. central bank's ability to manage its message at a critical juncture.

William Dudley, head of the New York Fed, and John Williams, head of the San Francisco Fed, both signaled support for an interest rate hike this year, saying they expect inflation to rise towards the Fed's 2-percent target. Williams sounded more hawkish, saying that just "a little bit" more data could convince him that a rate hike is needed.

But Charles Evans, head of the Chicago Fed, took a far more dovish view, calling for rates to stay near zero until mid-2016.

The Fed's 17 policymakers have scheduled 16 separate speeches or public appearances this week across the country, less than two weeks after the central bank decided to delay what would be its first rate hike in nearly a decade.

With financial markets increasingly predicting rates will not rise until next year, Fed Chair Janet Yellen attempted to set the record straight last week when she said the central bank was still on track to move before year end.

But the conflicting messages from Dudley, Williams and Evans did little to clear the air.

U.S. stock markets plunged on Monday with investors complaining that the Fed's so-called data-dependent policy stance is not providing enough clarity for financial markets.   Continued...

 
A woman walks past the Federal Reserve headquarters in Washington September 16, 2015.    REUTERS/Kevin Lamarque