- Home
- >
- Daily Accents
- >
- Markets watching Yellen at Jackson Hole for hike hints
Markets watching Yellen at Jackson Hole for hike hints
Rating:
Loading...Michael Every, head of financial markets research for Asia Pacific at Rabobank, told CNBC's "Squawk Box" that the consequences of telling the market that hikes were off the table this year would be "quite shocking."
While the initial reaction would be a weaker dollar and significant rally in most risk assets, the Fed would be boxing itself in longer term, he said.
"It effectively would be locked into a paradigm where we can't ever really raise rates," he said.
Now, Every said, to admit that hikes were off the table for 2016 would effectively be an admission that monetary policy had become ineffective.
Every expected such an admission would spur some markets into "absolutely overheating and probably ending very messily as a result."
He noted that the market expected the Fed would likely hike rates again this year, even though the Fed futures indicated that only a 50 percent chance was priced in currently.
He said the market would watch Jackson Hole, the Fed's symposium in Wyoming that starts on Thursday, for cues on the next rate hike.
"If we do get further certainly on that front, even if it means it's not going to happen until December, it could mean we get a pickup in the dollar this week," he said.
Varchev Traders If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
