Federal Reserve officials trying to decide when to raise interest rates for the first time in a decade may want to avoid waiting until December to make their move.
The reason: Treasury-market liquidity has a clear pattern of thinning out at year-end, potentially exacerbating volatility in reaction to an increase in the Fed's benchmark rate. A sharp rise in yields could hurt the economy and complicate liftoff.
These concerns won't be a deal-breaker if economic data support a rate rise in December and not sooner, economists say. Still, they could make officials look more favorably upon a September or October start. Fed Chair Janet Yellen has said liftoff will be appropriate this year if the economy evolves as expected.
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