Investors hungry for clues about when the Federal Reserve is going to raise rates are looking for, well, anything.
That crowd includes one bond expert who has honed in on the word "some."
Yes, just four letters that make up one decidedly indefinite pronoun, contained in the Federal Open Market Committee's seemingly innocuous post-meeting statement Wednesday, could provide a key as to when the U.S. central bank finally will begin what should be a painstakingly slow exit from zero interest rates.
"By inserting the word 'some' before 'further improvement in the labor market' in the part of the FOMC statement that describes conditions needed for liftoff, the Fed effectively lowered the bar," Hans Mikkelsen, credit strategist at Bank of America Merrill Lynch, said in an analysis for clients. "While this is a hawkish tilt, clearly the subsequent rally in stocks and decline in interest rates suggest that the market expected—or should we say feared—more explicit language preparing for liftoff."
Mikkelsen filed his note Wednesday as stocks indeed were in rally mode. Market sentiment cooled somewhat Thursday as traders weighed what to make of the Fed statement against more news of an economy that has yet to find anything more than mediocre growth despite nearly seven years of supposedly stimulative monetary policy.
Gross domestic product grew 2.3 percent in the second quarter, according to the advance reading of the number released Thursday, while first-quarter growth was revised up but remained at an anemic 0.6 percent.