It ain't over 'til the Fed lady sings (at Jackson Hole on Friday) but it seems like a hawkish consensus if emerging on the FOMC.
In a speech at the Aspen Institute in Aspen, Colorado on Sunday, Federal Reserve Vice Chairman Stanley Fischer told reporters “we are close to our targets” in the jobs market and inflation. Not growth, though. On that front, the Fed's long-run GDP estimates have been consistently revised to the downside.
No matter, Fischer says, everything's great. In the footnotes to Sunday's speech, the vice chairman writes, “Looking ahead, I expect GDP growth to pick up in coming quarters, as investment recovers from a surprisingly weak patch and the drag from past dollar appreciation diminishes.”
Fischer's comments are generally in-line with his colleagues. Last week, New York Fed head Bill Dudley also laid out a case for ignoring lackluster growth and hiking on "strong" labor market data. (We question just how strong the labor market is here.) On that, the market has bid up rate hike probabilities for December back to pre-Brexit levels.
What do you do with that?
Here you go.
(Buy Long Bonds)