Amended version: Rates could be increased an anticipation of an improved economy, according to someone (possibly a Fed member) interviewed (on NPR?) last week. (Hey, I can remember only so much, esp. if it was a week ago!). I was surprised because I was understanding Yellen's Fed as wanting to see various thresholds met rather than sort of extrapolate where the economy is headed.
"Citing risks of market volatility and financial instability, the International Monetary Fund again implored U.S. central bankers to hold off on interest rate hikes until next year.
"In its latest update on U.S. economic health, the IMF said barring any upside surprises to U.S. growth or inflation, the Federal Reserve should leave its benchmark short-term borrowing rate at its current pegged rate of 0% to 0.25%.
"The warning comes a day ahead of Wednesday’s release of the minutes of the Fed’s June 16-17 meeting. It is not the first time this year that the IMF has issued such a warning."
My question is, how long is the situation going to worsen? Is this a tradable event or hold on? Some say Greece is a drop in the bucket; others opine OMFG the euro is going to go bust. Disclosure: holding gains on DXD, SH.
I"m skeptical how the Fed measures inflation. The inflation's there - package sizes are smaller with prices about the same. I roll my eyes when retail make a point in telling you how much you saved (nothing like trying to make the consumer feel good about thier purchase and offer some positive reinforcement), and I'm thinking, yeah, that's because you had a 400% markup before your half-off sale.
I think we'll see one if not two token rate hikes in 2015.