Yellen speech could offer rate clues

Traders might want to postpone lunch Friday. Federal Reserve chair Janet Yellen is giving a speech on the outlook for the U.S. economy — and will field questions from the audience — that could offer clues into the U.S. central bank’s most current thinking about the timing of its interest rate hikes.

At 12:30 p.m. ET, the Fed chief will deliver a speech in Cleveland that will be closely watched by Wall Street.

The reason: The Fed hinted at its June meeting that it has not ruled out a so-called rate-hike “liftoff” this fall, perhaps as early as September.

But recent turbulence abroad, including Greece’s debt crisis and the stock rout in China, has some Wall Street pundits betting that the Fed may delay hikes until later in 2015 or even next year.

 The market is “looking for any indications that global concerns are weighing on the Fed decision,” says Bill Hornbarger, chief investment strategist at Moneta Group. 

Adds Boris Rjavinski, fixed-income strategist at UBS: “They claim to be data-dependent, so which particular data matters to them most — the labor market, inflation or GDP? How worried are they about Greece and China? What do they think about current market volatility in the context of a potential rate hike later in the year?”

 In short, Wall Street will try to gauge whether the recent turbulence abroad will outweigh the improving domestic situation and put the Fed back on hold.

usatoday.com