Don’t even think about a September rate hike. The Federal Reserve won’t pull the trigger until 2016, said Stifel Fixed Income’s chief economist Lindsey Piegza. ‘The Committee was very clear that they’ve recognized the under performance of the economy, talking about household spending still being very moderate and inflation still well below target,’ she said. ‘We expect this under performance to keep the Fed on the sideline much longer than the market expects into 2016.’ But the Fed gave no clues on the timing of a rate hike in its statement Wednesday, following its two-day policy meeting, where it once again left short-term interest rates unchanged. Rates have remained near zero for over six years. ‘The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term,’ the statement said. Meanwhile, the decision to keep rates unchanged during its July meeting was unanimous, a dovish sign.
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