Yellen: Rate hike appropriate if economic data continued to strengthen - BBH

Research Team at BBH, notes that the Fed Chair Yellen expressed concern about the disappointing employment data yesterday but she continued to suggest a rate hike would be appropriate if the economic data continued to strengthen. 

Key Quotes

“However, she dropped the guidance used at the end of May, when she said in the "coming months."  Her speech yesterday did not offer a time frame. 

The August Fed funds futures contract, the cleanest read for expectations of the late-July FOMC meeting firmed further as the market reduced the odds of a July move.  At 43 bp, the August contract is pricing in a 24% chance of a hike.  On May 27, the August contract implied 56 bp or a 76% chance of a hike.  This has helped keep the dollar on the defensive.”