The Federal Reserve’s credibility crisis received another jolt after Fed Chair Janet Yellen effectively ruled out a June rate hike in a speech given the Monday after a particularly weak May nonfarm payrolls report.

“Markets have grown used to the Fed crying wolf. Yellen, Bullard, Dudley et al have spent the last 2 or 3 years promising investors that interest rate hikes are on the way only to back away at the slightest hint of market turbulence,” said Floyd Paché, chief economist at Shinsei Corporate Management.

“William Dudley, the President of the New York Fed, recently said that the market had failed to price in the likelihood of one or more rate hikes in 2016 but, going on the tone from Yellen on Monday, it looks like the market knows better than any Fed official.”

The Fed has continually maintained that the case for interest rate hikes would depend on the data but it is increasingly confusing to the market as to which data the Fed depends. The central bank is facing increasing criticism for continuing to sound while the data is limiting their ability to deliver a 25 basis point increase in interest rates.

“Clearly, the market is better able to interpret the data from the economy than the Fed and, currently, it sees headwinds that would normally preclude interest rate hikes, not welcome them,” concluded Paché.

Shinsei Corporate Management continues to prefer a bias towards emerging market equities and commodities warning that downside risks exist in US stocks which it regards as “distinctly overpriced”.

About Shinsei Corporate Management:
We at Shinsei Corporate Management express our dedicated commitment to the local communities around us and to our loyal clients’ in a variety of different ways.

Helping to realize public orientated projects such as the building of new schools and healthcare centres are a key focus of our core beliefs of what a financial institution should be doing to better our local communities. Assisting with the sale, merger or acquisition of a company that requires a strong partner to lead them safely through treacherous waters. We ensuring the preservation of personal wealth, pension funds and beneficial foundations all get the right level of care and attention the need in order to maintain stability and thrive.