Tag Archives: US Fed rate forecast

As it prepares to announce a partial shrinkage of its balance sheet this week, the question is how firmly the Fed signals the next rate hike.The Fed is widely expected to announce a partial shrinkage of its balance sheet at its 20 September meeting, in line with the guidance it provided in June.We also expect Yellen to point to the possibility of another rate hike soon (while remaining vague about the exact timing), dependent on further improvements in inflation. This should be backed by the...

The inflation rate remains tepid, but we still think there is a greater probability that the Fed hikes rates in December than the market is currently pricing.CPI inflation was 0.4% m-o-m, boosted by gasoline prices, pushing the y-o-y print to a still-tepid 1.9%. Core CPI inflation was up 0.25% m-o-m; the y-o-y reading was stable at 1.7%.While improving from recent lows, there is no sign of a ‘regime shift’ in US inflation, despite the tight labour market. Globalisation and technology...

In spite of disappointment on the fiscal policy front and even though we expect a slowdown in growth next year, the US economy remains in fine fettle.Chaotic developments in the White House and ongoing gridlock in Congress have significantly reduced our expectations that the Trump Administration will bring a major fiscal boost to the US economy, particularly in 2018. In other words, we no longer expect a growth- and sentiment-boosting fiscal reform, nor a large-scale infrastructure spending...