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Clarksville, TN – The FOMC minutes (from the July 26th-27th policy meeting) showed that officials were divided on the timing of the next rate hike. Some felt that the labor market had already tightened enough and that the Fed risked generating financial excesses by keeping rates so low for so long.
Others felt that there was plenty of time to wait for more information and that it would be harder to correct course if the Fed moved too rapidly. Among voting FOMC members, the hawkish view (those wanting to raise rates sooner rather than later) appeared to be a minority.Industrial production rose more than expected in July, boosted by hot weather (increased output of utilities) and a possible seasonal adjustment quirk in autos (more muted plant closings this year).
Oil and gas well drilling, down 75% since late 2015, rose 4.9% (suggesting a possible bottom in energy exploration).
Consumer price inflation was a bit lower than expected (ex-food, energy and shelter, the CPI rose 1.4% y/y).
Next week, market participants may react to any surprises in the economic data reports, but there’s nothing that will significantly alter the overall economic picture. The focus will be on Janet Yellen’s Jackson Hole speech.
The Fed chair may not provide any definitive clues on what policymakers will do at the September 20th-21st policy meeting. Rather, she is set to examine the variety of tools that the Fed has used during the recession and recovery.
Consumer Money Rates
Treasury Yield Curve – 08/19/2016
As of close of business 08/18/2016
US government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. US government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the US government.
Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments.
Tax Equiv Muni yields (TEY) assume a 35% tax rate on triple-A rated, tax-exempt insured revenue bonds.
The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete. Data source: Bloomberg, as of close of business August 18th, 2016.
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
TopicsBonds, British Pound, Clarksville, Clarksville TN, Consumer Confidence Index, DJIA, Dow Jones Industrial Average, Employment Cost Index, Euro, European Union, F&M Investment Services, Fed, Federal Open Market Committee, FOMC, GDP, gold, Inflation, Interest Rates, Janet Yellen, Japanese Yen, Mexican Peso, MSCI EAFE, Nasdaq, Producer Price Index, Raymond James Investment Services, Russell 2000, S&P 500, Stock Market, Stocks, U.S. economy, U.S. Stock Market, U.S. Treasuries, U.S. Treasury, United States, Weekly Market Snapshot, Yuan
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