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3 Sep 2015
US rate hike on the horizon - Deutsche Bank
FXStreet (Delhi) – Asoka Wöhrmann, Chief Investment Officer of Deutsche Asset & Wealth Management, suggests that the recent favourable development of the U.S. labor market supports the case for the Fed to start raising key interest rates.
Key Quotes
“Although the exact date is still open, there is hardly any doubt that rate hikes are in the offing. A rate hike would appear warranted by the number of job vacancies having reached its highest level since 2001 and a sharp downturn in the number of long-term unemployed.”
"The Employment Cost Index – a labor-cost index which is not distorted by structural changes within corporations – shows that wage pressures are increasing so that a rise in the U.S. core inflation rate is highly probable in the year to come."
“U.S. Fed chair Janet Yellen may well prefer to make small steps in good time, instead of being forced to take the necessary actions to stabilize prices too late and under pressure.”
“The first phase, which should cover most of 2016, will be a return to a normal monetary stance. If the job market continues to improve and inflation continues to rise, the monetary base will be reined in.”
Key Quotes
“Although the exact date is still open, there is hardly any doubt that rate hikes are in the offing. A rate hike would appear warranted by the number of job vacancies having reached its highest level since 2001 and a sharp downturn in the number of long-term unemployed.”
"The Employment Cost Index – a labor-cost index which is not distorted by structural changes within corporations – shows that wage pressures are increasing so that a rise in the U.S. core inflation rate is highly probable in the year to come."
“U.S. Fed chair Janet Yellen may well prefer to make small steps in good time, instead of being forced to take the necessary actions to stabilize prices too late and under pressure.”
“The first phase, which should cover most of 2016, will be a return to a normal monetary stance. If the job market continues to improve and inflation continues to rise, the monetary base will be reined in.”