FXStreet (Barcelona) – The concerns regarding the better labour market data and low energy price not resulting in a desired increase in consumer spending remain overblown, and the recent US retail sales data suggest the June FOMC meeting will likely see an upbeat tone regarding the economy, according to Economists at Deutsche Bank.
Key Quotes
“In order for the Fed to remain on track to raise interest rates sometime later this year, it will need to be reasonably confident that the economy will grow above trend over the next several quarters. This largely boils down to the trajectory of consumer spending given the expected drags from energy-related capital spending and declining exports.”
“The elevated savings rate over the past several months has raised concerns amongst some policymakers that an improving labor market and low energy prices are not having the desired impact on consumer spending. In our view, these fears are overblown. While goods spending is only a little over a third of total consumption, at the very least, yesterday’s retail sales figures should result in a more upbeat tone in next week’s FOMC meeting statement.”
(Market News Provided by FXstreet)