Goldman Sees The Fed's September Actions Dependent On This Week's Jobs Report

Remarks made by Fed Chairman Janet Yellen at the Jackson Hole conference have increased the probability of a rate hike being announced at the September FOMC meeting, Goldman Sachs’ Jan Hatzius said in a report. He added, however, that any action would depend on the August jobs report.

Fed Remarks At The Jackson Hole

Fed Chairman Yellen indicated that the case for a rate hike had strengthened in recent months. The comment comes after remarks made by other Fed officials over the past couple of weeks indicating an improved economic backdrop and reason to consider a rate hike in the near term, analyst Hatzius noted.

“In our view, if the [August] employment report continues to indicate an improving labor market, the FOMC may well raise rates at the September meeting,” the Hatzius wrote, adding that the probability had increased from 30 percent to 40 percent.

The analyst stated further that in case the Fed keeps the rate unchanged in September, there was a 40 erpecnt probability of it being raised at the December meeting, taking the “cumulative odds for at least one increase this year” to 80 percent.

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