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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Sep 22 2014

What the Fed Watches That May Impact the Timing of Rate Hikes

The Fed will conclude the QE taper next month and start a rate hike cycle next year. Some say this is long overdue, yet Chairman Yellen seems to be in no rush to raise rates.

Our report delves into this new chapter in monetary policy, including various metrics that the Fed has indicated will influence the timing and pace of the rate hike cycle.

At the same time, a separate GDI-related “stall speed” measure, outlined in a 2011 Fed study, looks troubling.  For the past three quarters, it has stayed below 2%, which is the threshold below which they determined “the economy has tended to move into a recession.”

ECRI’s latest study reviews these issues in detail, providing insight into the competing considerations likely to influence the timing of rate hikes in the coming months.

Related News & Events

Japan's 4th Recession Since 2008: Why Should We Care?

Wall Street Journal September 10, 2014

Wall Street Journal Live talks with ECRI about how Japan is on track for another recession, and what that means for Europe and the U.S. More