Federal Reserve
Chair Janet Yellen insisted only two weeks ago that the U.S. economy
remained on a path that would allow the central bank to raise rates in
2015 for the first time in nine years.
Now
however, some of her colleagues are suggesting it might be better to
wait until late this year or even 2016, citing concerns about the
international economic outlook and U.S. consumers' reluctance to open
their wallets.
Those concerns will be back in focus on Friday when May job numbers are due. The figures are expected to show a 225,000 gain in employment, broadly in line with recent averages, but a disappointing reading could strengthen the dovish camp.
Lael Brainard, a voting member of the Federal Open Markets Committee, signalled this week that it may be prudent to delay a rate rise. She was followed on Thursday by Daniel Tarullo, another voting member, who said data this year had so far failed to show a rebound from the first quarter.
“We get another job number tomorrow, but I think in a broader sense, there are more questions at this point in 2015 than at this point in 2014,” Tarullo said.
Long-time dove Charles Evans of the Chicago Fed suggested he might push his preferred timing for a first rate rise into the second half of 2016 from early next year, matching the view of his colleague, Narayana Kocherlakota at the Minneapolis Fed.
While Brainard, who has been on the Fed board for a year, did not rule out a move this year, she warned of the possibility of a "more significant drag on the economy" from weaker exports and weak manufacturing.
Back in March, Brainard projected a 2015 rate hike, along with 14 other Fed policymakers. Fourteen of 17 Fed policymakers at that time expected at least two rate increases this year, a summary chart of their forecasts shows.
Two hikes this year would now appear to be less likely, particularly if the June meeting at which new projections are released passes, as now expected, without a rate rise.
Those concerns will be back in focus on Friday when May job numbers are due. The figures are expected to show a 225,000 gain in employment, broadly in line with recent averages, but a disappointing reading could strengthen the dovish camp.
Lael Brainard, a voting member of the Federal Open Markets Committee, signalled this week that it may be prudent to delay a rate rise. She was followed on Thursday by Daniel Tarullo, another voting member, who said data this year had so far failed to show a rebound from the first quarter.
“We get another job number tomorrow, but I think in a broader sense, there are more questions at this point in 2015 than at this point in 2014,” Tarullo said.
Long-time dove Charles Evans of the Chicago Fed suggested he might push his preferred timing for a first rate rise into the second half of 2016 from early next year, matching the view of his colleague, Narayana Kocherlakota at the Minneapolis Fed.
While Brainard, who has been on the Fed board for a year, did not rule out a move this year, she warned of the possibility of a "more significant drag on the economy" from weaker exports and weak manufacturing.
Back in March, Brainard projected a 2015 rate hike, along with 14 other Fed policymakers. Fourteen of 17 Fed policymakers at that time expected at least two rate increases this year, a summary chart of their forecasts shows.
Two hikes this year would now appear to be less likely, particularly if the June meeting at which new projections are released passes, as now expected, without a rate rise.
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