Courtesy of Mish.
Futures were negative following Friday's dismal job showing but that lasted only as long as the the market open.
Right on cue came dovish pronouncement from Fed governor William Dudley in a speech to a New Jersey audience on the regional and national economy.
Reuters reports Rate Hike Timing Now Unclear.
The timing of the Federal Reserve's interest rate hike, which would be its first in nearly a decade, is unclear and for now policymakers must watch that the U.S. economy's surprising recent weakness does not signal a more substantial slowdown, a top Fed official said on Monday.
New York Fed President William Dudley's comments were the latest sign that a string of disappointing economic data, including a sharp drop in jobs growth last month, is derailing a Fed plan to tighten monetary policy around mid-year after more than six years of rock-bottom rates.
In relatively dovish remarks to a business audience in Newark, New Jersey, Dudley did not repeat his refrain that a rate hike could reasonably be expected to come by mid-2015.
A permanent voting member of the Fed's policy panel and a close ally of Fed Chair Janet Yellen, Dudley repeated that the rate hike would come once the labor market improves more and when policymakers are reasonably confident that low inflation will return to a 2 percent goal.
"The timing of normalization will be data dependent and remains uncertain because the future evolution of the economy cannot be fully anticipated," he said, adding he expects the path of rate hikes to be "relatively shallow."
Low oil prices and the drop in domestic drilling will exert a "meaningful drag" on U.S. economic activity, he said. The strong dollar will continue to hurt U.S. trade performance, and has already shaved an estimated 0.6 percentage point from overall 2015 growth, he added.
Longer term, he said the Fed's key policy rate will probably rise to only about 3.5 percent, lower than previously thought.
Dudley has been under political pressure for perceived regulatory missteps by his New York Fed, with lawmakers and even one former Fed official floating changes. But Dudley defended the status quo on Monday, saying his Fed bank should continue to play a key role in monetary policy during periods of stress.
Text of Dudley Speech
Reuters, as is typical from mainstream media, did not bother linking to the text of Dudley's speech….
