Inopportune Timing: Key Economic Data Due Out After Fed Meets -- Barron's Blog

        By Amey Stone
        In a way it's bad luck for the data-dependent Fed that this month's two-day meeting concludes right before two important pieces of economic data are released.
        The Federal Open Market Committee meeting ends Wednesday at 2 p.m. ET, when the committee will release a statement. And on Thursday morning, the government's first stab at calculating second quarter gross domestic product (GDP) is reported. That's followed on Friday morning by the Employment Cost Index (ECI), a quarterly measure of wage growth that the Fed watches closely.
        That leaves the Fed, which isn't expected to raise rates this month, without much to say on Wednesday.
        "It is kind of unfortunate that we'll learn quite a bit about the U.S. economy on Thursday and Friday that the Fed won't know during its meeting," says John Bellows, portfolio manager at Western Asset Management. "It's going to be a pretty boring meeting actually."
        Bellows thinks the Fed will raise rates in September -- provided, of course, the data continues to show the economy is growing. If the data is disappointing, then liftoff cold get pushed to December.
        What about the slump in energy?
        Bellows points out that the Fed was slow to react to the late 2015 slide in prices -- it didn't respond until March when it lowered its economic projections. Now, crude and the dollar are trading about where they were in March. That also puts the Fed in wait-and-see mode.
        "The Fed doesn't want to overreact to short-term movements in volatile markets," says Bellows. "If oil continues to fall, that will be a concern for them. Right now, it is basically unchanged since March and not a big consideration."
        (END) Dow Jones Newswires

        July 28, 2015 17:15 ET (21:15 GMT)

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