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3 Jun 2015
Fed’s lift-off expected by December – Rabobank
FXStreet (Edinburgh) - Strategist Philip Marey at Rabobank believes the Fed could hike rates towards Q4, with December being a good candidate.
Key Quotes
“The economic slowdown has averted the June rate hike that the FOMC had been aiming for”.
“At the April meeting, the majority thought it unlikely that the data available in June would provide sufficient information that the conditions for a rate hike had been satisfied”.
“Of course, they did not rule it out either, but this is because a month earlier they promised to be data-dependent”.
“However, in practice they are already looking beyond June and waiting for evidence that the recovery is on track and strong enough to absorb a rate hike”.
“The Fed would like to see the negative impact of the strong dollar and the low oil price on the US business sector fade and the anticipated positive impact of cheap energy on consumer spending to materialize”.
“We don’t think this will occur before the second half of the year and then it will take a number of months for the evidence to build a convincing case that the economy can deal with a rate hike”.
“All in all, we see no reason to change our long-held forecast that the Fed will delay its first rate hike to Q4, more specifically December”.
Key Quotes
“The economic slowdown has averted the June rate hike that the FOMC had been aiming for”.
“At the April meeting, the majority thought it unlikely that the data available in June would provide sufficient information that the conditions for a rate hike had been satisfied”.
“Of course, they did not rule it out either, but this is because a month earlier they promised to be data-dependent”.
“However, in practice they are already looking beyond June and waiting for evidence that the recovery is on track and strong enough to absorb a rate hike”.
“The Fed would like to see the negative impact of the strong dollar and the low oil price on the US business sector fade and the anticipated positive impact of cheap energy on consumer spending to materialize”.
“We don’t think this will occur before the second half of the year and then it will take a number of months for the evidence to build a convincing case that the economy can deal with a rate hike”.
“All in all, we see no reason to change our long-held forecast that the Fed will delay its first rate hike to Q4, more specifically December”.