The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Markets will be looking for signals about the Fed’s direction when chair Janet Yellen speaks at Jackson Hole, Wyo., on Aug. 22.
Markets will be looking for signals about the Fed’s direction when chair Janet Yellen speaks at Jackson Hole, Wyo., on Aug. 22.
(JOHN GRESS/REUTERS)

Doubts grow over timing of Fed rate hike

The Federal Reserve says there “remains significant underutilization of labour resources.” That’s the new explanation for why the Fed’s benchmark interest rate must be kept at zero for longer. It’s going to be a tough sell.

“We grown increasingly vocal over recent weeks that the Fed continues to run policy best suited for the Great Recession, yet by any measure economic activity has evolved beyond that point with growth running above potential and much of the slack in the system having been absorbed,” the New York-based U.S. economics team at RBC Dominion Securities advised clients Wednesday.