Scotiabank Saw Little Indication Of A September Rate Hike In Yellen's Speech

Derek Holt of Scotiabank saw no surprise in Fed Chair Janet Yellen's speech, which contained little indication of a rate hike in September.

"If Yellen was thinking of raising rates in September, then I would have expected to see firmer time-dependent language, like "soon" or "in the coming weeks" or "in the near term" etc," Holt wrote in a note.

Related Link: Citi Thinks The Fed Will Use Its September Meeting To Tee Up A December Rate Hike

According to the economist, the absence of specific timing triggers two possibilities:

• Yellen wishes to leave that decision to each game day before the full FOMC.
• In itself it is a signal to rule out September as too soon given the Fed likes markets to be lined up perfectly for its decisions.

Holt bets on the second interpretation and expects there will be no rate hike in September.