Chicago PMI Disappoints
The Chicago Purchasing Managers Index has just been released in the US. This figure is a miss at 55.9, consensus expectation were for 58.5 and the February reading was 59.8.
This PMI is not an overall US figure but rather it is specific to the Indiana, Illinois and Michigan region. Nonetheless it is respected by the market as a very valuable early indicator of the overall state of the US economy.
Also in Chicago later today Federal Reserve chair Janet Yellen will deliver a speech. She has previously said that a cycle of interest rate rises will begin six months after the Fed ends it’s bond purchase program, at the current pace of tapering this program is set to end in Q4 of this year which would imply rate hikes can begin before H2 2015. Supporting this move was the decoupling of interest rate rises from the metric of unemployment falling below 6.5%, this was an important move by the Fed as employment numbers due this Friday have the potential to move closer to the 6.5% threshold.
Yellen is likely to treat today’s speech as an opportunity to reinforce the message that the Fed is committed to a steady as it goes approach to US monetary policy. Although the markets will be watching closely there are no surprises expected from the Fed chair today, the intended speed of tapering is perhaps the only area where there are still question marks around the Feds intentions. Janet Yellen has yet to make a firm comment on whether the Fed will continue to reduce the bond purchase program at the current rate of $10bn per month or whether the Fed intends to keep it’s options open in this regard. There is the potential for the Fed to increase the pace of tapering if this becomes necessary in the coming months in order to cool the growth rate of the US economy.
Sorry. No data so far.