The Federal Reserve is once again in the spotlight. The FOMC begun its scheduled meeting yesterday and it is due to conclude it this evening with a press conference that will be surely closely watched by analysts and investors. Although the FED already anticipated at the previous meeting that an interest rate hike was likely to be excluded before June, more and more analysts have been forecasting that the US Central Bank will undertake a rate increase sooner rather than later. Speculations aside, the major argument for the Federal Reserve to trigger the first interest rate hike since the financial crisis was the consistent improvement in the US economy and the positive trend of the majority of economic indicators. However, have economic data really shown such a strong uptrend? Perhaps not so much as one would assume, and therefore it would be very interesting to look for hints of whether the FED intends to become more proactive and depart from its historical data dependent approach.

The latest economic data were actually disappointing, and although we did not witness yet a negative trend, they did not offer a firm positive confirmation either. While the only real positive indicator was the strong Non-Farm Payroll number, which contributed to lower further the unemployment reading, the remaining indicators either fell or came in below expectations.

Wage growth, regarded by the FED as the single most important driver for an interest rate increase, declined in February, after what seems to have been a one off increase in January. US Manufacturing data disappointed, with the stronger dollar starting to have some negative effects on the country’s production and exports, while credit-card use also hit a 14-month low, indicating that consumers are not channeling the savings from cheaper oil back into the economy yet. A confirmation of this thesis can equally be found in the unexpected 0.6% drop in February’s Retail Sales number that missed analysts’ expectations for a 0.3% expansion. Adding to these, the March Consumers Confidence Index fell to 91.2 form 95.5 in February, along with the FED’s Industrial Production report that indicated a 0.1% growth, below analysts’ expectations of 0.2%.

From the latest economic data the US economy does not seem to keep up the “solid pace” of expansion that Federal Reserve’s officials saw before their previous meeting at the beginning of the year. And from here the main question is again: “will the FED postpone any actual interest rate increase discussion to the second half of the year, hoping to see better economic data in the meantime, or will the FED take a bolder approach offering solid indications that it would hike interest rates in June?”

According to a survey conducted by Bloomberg on March 12th, 30 analysts out of 66 believe that the Federal Reserve will indeed increase interest rates in June, while 21 analysts think the interest rates hike will come later on in September. Despite the disappointing economic data for February, there is an increasing number of economists and analysts that believe that the weak economic readings have more to do with bad weather and seasonality rather than a deterioration in fundamentals, and that the FED will still be pressured to raise interest rates in June. Supporting this view is also an increasing number of Federal Reserve’s officials that are openly calling for an interest rate hike at the next FOMC’s meeting, while Jane Yellen hinted that the patience of the FED may be finally running out. Investors will have some new clues tonight when the ongoing meeting will conclude, and Yellen will shed some light on the FED’s next move.