Wavering expectations
The release of the Fed’s Beige Book yesterday has once again cast doubt on the organization’s willingness to deliver the highly anticipated key rate hike. The book stated that growth in the various districts was “modest to moderate” and the absence of inflationary pressures, leading observers to question whether a rate increase will occur in September, even though as recently as last week, comments by Vice-Chair Stanley Fischer had brought such a scenario to the forefront.
This same doubt now appears to be present with the Bank of Canada, as the possibility of a rate cut in September was recently gaining in popularity. In both cases, all signs seem to indicate that it will be difficult to have a firmer idea before we get a look at jobs figures released on Friday and, in the case of Canada, at trade balance data slated for 8:30 this morning.
Also on the topic of monetary policy, we’ll be keeping an eye on Europe to see whether the ECB will announce new easing measures. President Mario Draghi will be explaining the ECB’s earlier rate decision at a press conference beginning at 8:30.
