Last Fall, the CNBC Fed survey of economists and fund managers showed their belief that the Fed would not begin raising interest rates until this June.  That didn’t make sense to me, and I suggested it would not happen until much later in the year.  Today, the latest survey showed their expectation that the Fed would not begin raising interest rates until this September or three months later.

It still ain’t gonna happen!

The Fed will not raise rates before December at the earliest, for two reasons.  First, Fed Head Janet Yellen is a dove, meaning she worries more about unemployment than inflation.  While the simple unemployment rate has fallen nicely and the economy did produce three million jobs last year, she is very sensitive to the high U-6 level of employment, which includes those part-timers who cannot find full-time work, plus the historically low 62.7% rate of the population that participates in the workforce and actually looks for work.  Keeping rates low will help.  Higher interest rates certainly will not help!

Second, the dollar is getting too strong, which is already hurting our exporters such as Caterpillar.  Raising interest rates in this country will make the dollar even more strong and hurt our exporters even more.  As Europe falters, that also makes the dollar stronger.  As China slows down, that also makes the dollar stronger.  All this ain’t good!

Unfortunately, there is little the Fed can do right now, especially since they are the only branch of government that has done anything helpful so far . . .