The Weekly Brief (04 April 2016) - J.P. Morgan Asset Management

The Weekly Brief (04 April 2016)

Contributor Global Markets Insights Strategy Team

The market continued to push out rate expectations as Janet Yellen, chair of the Federal Reserve (the Fed), struck a dovish tone in her latest economic outlook speech which may have surprised investors. The two indicators the Fed are mandated to target–inflation and employment–are both trending higher. But as this week’s chart shows, Yellen looks to be focusing more on international factors such as global growth, the US dollar and China. The shift in attention away from the US economy towards international factors is likely to result in less rate hikes in the short term. However, the more explicit inclusion of global drivers into the Fed’s thinking comes at the cost of more uncertainty and unpredictability down the line, as investors need to monitor more factors that could drive the pace of rate hikes.

Number of times specific words were mentioned by Janet Yellen

Word count in economic outlook speeches

Source: US Federal Reserve, J.P. Morgan Asset Management; data as of 1 April 2016.

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The Weekly Brief (4 April 2016)