Weekly Market Commentary 10/21/2016

This week’s data reinforces the view that the Federal Reserve will stand pat at its policy meeting in early November. To be sure, the odds were stacked against a rate increase even before this week, if only because the meeting occurs so close to the presidential election on November 8. But aside from its desire to remain apolitical, the data-dependant Fed simply does not have any compelling reason to pull the rate trigger before it meets again in mid-December. While the week’s reports do not indicate the economy is losing momentum, they clearly do not suggest any pickup in activity. Nor for that matter, is the Fed’s 2% inflation target any closer to being met than it was before this week.