Talks of rate hike emerge

The highly positive unemployment number released on Friday brings about talks of the Fed raising rates sooner than expected.  In the past Fed minutes, the public has heard just about the same words from the Fed about the Fed funds rate: that it is likely to stay at such low levels for an extended period of time.  But that there have been “just” 11,000 jobs lost last month might just push the Fed to start thinking about when to perform a rate hike.  From a WSJ report:

Futures markets Friday put a 68% probability that the target will be raised to 0.5% by June and more than 90% odds that it will hit 1% by next December.

Asked about the jobs numbers Friday, Charles Plossser, president of the Federal Reserve Bank of Philadelphia, said, “It’s hard not to take some good news away from that…but I’d emphasize one month does not a trend make.”

Indeed, let’s see what happens next month. Was this month’s number for real or just a blip? Maybe then we can begin to spot a trend.

The story can be found via the WSJ.


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