Where events can change the market drastically some events are obviously so directly linked that all traders wait for the event, gripping their seats. Federal Reserve Chairwoman Janet Yellen has all eyes fixed on her as she prepares for her speech in Jackson Hole, Wyoming.
Stock Market closed stable on Friday but there has been much debate about whether or not she is going to give out any information on an increase in rates anytime in the future. It is quite imperative for the stock traders to score an increase in the rates yet the situation is going to keep the pressure built until 26th of August.
Yellen is in a unique position at the moment while the trading world desperately awaits her comments at the Kansas City Fed’s annual function. Where some are optimistic that Yellen will be signaling a raise in coming September however with a very low probability of 18% backs this believe.
Traders have been under great pressure and in turn the pressure shift on to Yellen in the current situation where market data on inflation and economy doesn’t support a raise in the rates. On the other hand, traders have been desperate to get a raise to the point that lobbying for the cause has also been heard of in the trading circles.
Market analysts, however, believe that given the poor performance of different sectors such utilities makes it imperative that the Federal reserve announces a raise. It is, however, going to be a very tough decision especially when other Central Banks are performing on negative rates. On the other hand, risk pushing the hike back until December means risking a lot more and cornering themselves right from the start.
Traders in the US now trust less on the Federal Reserve as the chance to change two raises during the year 2016 to one raise are getting higher. The unrest in the industry puts Yellen and her team under immense pressure where on one hand the trading industry is counting on her while on the other hand the greater good persist them to make a just decision.
The speech titled “Designing Resilient Monetary Policy Frameworks for the Future”, is aptly titled to help Yellen take some pressure off her back however the uncertainty that surrounds her decision can keep the market in a sway for next six days. Analysts are hoping that the Market PIMI reports for July and August, due next week, can help improve the situation.