Weekly Market Commentary 09/29/2017

Despite the growth-dampening impact of Hurricanes Harvey and Irma, the stubbornly low inflation rate and the array of uncertainties regarding fiscal policy, the Federal Reserve appears determined to put through a third interest-rate hike this year. That’s the clear message conveyed by several Fed officials in recent weeks, including, most recently, Chair Yellen on Thursday in a speech to the National Association of Business Economists. Quite simply, the Fed is more worried about stoking an overheated economy and falling behind the inflation curve than the risk of stifling growth by raising rates too early. In light of the hawkish comments of several notable officials, we concur that the Fed will likely pull the rate trigger in December providing it has some evidence that inflation is picking up.