Fed hike still coming soon (which should be good news)

Fed Chair Janet Yellen used a speech last night to send a pretty clear signal that US interest rates are still likely to be raised later this year, despite the hesitancy last week. This shouldn’t be a surprise, given that 13 of the 17 FOMC officials are already on record as expecting to hike no later than December. What’s more, the positive tone in equity and commodity markets today in the wake of Yellen’s comments supports our view that the gradual lifting of US rates from emergency lows might actually reassure investors about the global economic outlook.