Improving data point to September rate hike

The Fed is very unlikely to spring any surprises at the upcoming FOMC meeting, which concludes next Wednesday 27th July, but a September rate hike is a distinct possibility. The statement next week should acknowledge the apparent pick-up in second-quarter GDP growth, particularly the recent strength of consumption, and also the rebound in employment growth in June. The Fed won’t commit itself to a September rate hike at the July meeting, however, particularly not when Chair Janet Yellen will be speaking at this year’s Jackson Hole symposium on 26th August.