Rate Hikes:  Today, Federal Reserve Chairwoman Janet Yellen spoke at a panel discussion at the Radcliffe Institute for Advanced Study at Harvard University.  Ms. Yellen reiterated that a rate increase would be appropriate “probably in the coming months” provided that the economy and labor market continue to strengthen.  Within the past few days, other rate-setting committee members had similar comments, foreseeing two or three rate hikes this year.

Survey Says: Yesterday’s article demonstrated that consumers are highly in-tuned to changes in gas prices.  Today, we see that consumers are highly in-tuned to interest rate changes as well.  Back in December 2015 during the Federal Reserve’s last rate increase, consumer expectations for interest rates one year from now were at series highs (3.71).  At the end of March 2016, Ms. Yellen’s speech to the Economic Club of New York indicated that uncertainty in the global economy called for a slower path of interest rate increases.  In April, our survey displayed that consumer expectations for higher interest rates one year from now dropped marginally from the previous month (3.59 in March to 3.53 in April), as the Fed showed that it would push off rate hikes to a later date and consumers were able to take a breath.  That brings us to today.  Follow our Consumer Pulse survey to see how consumers will react to Janet Yellen’s most recent rate increase comments and the release of the April FOMC meeting minutes released on 5/18.

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