Monday, August 3, 2015

IMF Chief Backs Off Criticism of Fed Rate Hike

Late last week, Federal Reserve Chair Janet Yellen and International Monetary Fund Managing Director Christine Lagarde met on stage at an Institute for New Economic Thinking event.

Lagarde said that emerging markets are better prepared for the first Fed rate hike, having learned lessons from the taper-tantrum in May 2013.

She said she was pleased that Yellen has stressed that the timing of the first rate hike depends on the economic data.

This is a considerable walkback from her statements just a few weeks ago that it was too early for the Fed to hike rates.

Translation: She got the message: Get on board the rate hike is coming,



  1. There is zero chance of a September rate hike. The world with the exception of the US is liquidating. Prices of commodities have collapsed. Where is the boom except in fictitious gov stats and Keynesian metrics? In the US, a handful of shares are making new highs as well a handful of Toni real estate market. That's your boom? The boom is a zero interest rate charade. There is no growth period in the real economy.

  2. Any rate hike will be puny and merely symbolic. They've been talking about it for so long that a failure to do so may have people questioning the Fed's credibility, which I find amusing, because you can't lose something you never had.

    Regardless, whatever hike occurs will be quickly followed by ZIRP again, followed by either QE4, another fiscal stimulus, or both.

    One thing is certain: the leadership in Washington will NEVER do the right thing when they feel another can-kicking operation is possible. Will they recognize the inevitable currency crisis when it emerges?