US Consumer’s fears could influence Fed’s calculus – RBS

By FXStreet FXStreet (Guatemala) – Analysts at RBS explained that on August 26th, NY Fed President Dudley called the case for a September rate rise “less compelling”, adding that recent developments have increased downside risks, but that any weakness would be unlikely to show up in the data immediately.

Key Quotes:

“At the time, he noted that the August University of Michigan survey of consumer confidence would be one of the first indicators that may show a clear impact from the recent tightening of financial conditions.”

“But the revision to the August print Mr. Dudley referred to was altered only slightly, and consumer confidence in August dipped from 93.1 to 91.9, towards the bottom, but still within the 90.7 – 98.1 range that has prevailed since December.”

“But that print likely did not fully reflect the impact of the late-August volatility, and the September U of Michigan confidence index should be watched closely. With the outlook for the Fed’s meeting in just one week still highly uncertain, a clear sign that consumers became significantly more concerned about the outlook could impact the Fed’s near-term calculus. The August PPI is released in the US as well.”
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Source:: FX Street