Fed’s Lockhart in a speech in Idaho:
– Calls June job growth ‘strong and quite broad based’
– Uncertainty around Brexit, though not a "Lehman moment" could weigh on business investment and create an income headwind for years to come
The Fed is playing both sides of the trade. First, they want to say that the Brexit vote isn’t changing anything in the economy but they’re also using it as an excuse to back away from hikes. My thinking is that they were going to back away form them anyway and this is a convenient excuse. The risk is that they aren’t as dovish as the market thinks.
