Lockhart virtually promised hikes in September or sooner
There are two types of economic data. The numbers and the way the Fed sees the numbers.
Today was an exercise in the difference. US durable goods orders numbers were dismal and the core component has been falling for 8 months. Yet what mattered were comments from Atlanta Fed President Dennis Lockhart who said it's "quite likely" that rates go up in June, July or September and that if waiting went beyond September it would be because "we were really disappointed in the stream of data that come in."
Lockhart is a good barometer for the core of the FOMC. His comments often synch with the thinking of Yellen, Fischer and Dudley.
The Fed has preached data dependence but comments like this from Lockhart show the first rate hike isn't as data dependent as believed. Or maybe a spell of slightly soft/strong data simply shifts the hike from June to July or September, rather than taking it off the table.
The US dollar climbed as the comments sunk in. Some of that dollar strength has been sapped by the stock market, which doesn't like the sound of rate hikes. The S&P 500 has fallen by as much as 1%.