30 Jan 2015
Fed likely to hike rates in September – Nomura
FXStreet (Barcelona) - Lewis Alexander of Nomura, previews the March FOMC meeting, and expects Fed to hike rates in September than June.
Key Quotes
“One way or another, the March FOMC meeting is likely to be consequential. If the Committee is going ahead with a June “liftoff,” it will likely indicate that at the March meeting.”
“On the other hand, if the FOMC decides to take a June interest rate increase off the table, it will likely signal that in March as well.”
“To some degree, the FOMC sent mixed messages in the statement it released after its meeting earlier this week. Its description of the state of the real economy was quite upbeat, particularly given the fact that recent data have been disappointing. On the other hand, the Committee indicated that the near-term outlook has deteriorated.”
“The central tendency of the FOMC’s December forecasts for core inflation in 2015 (q4/q4) was 1.5% to 1.8%, compared to a central tendency for 2014 of 1.5% to 1.6%. We believe that core (and headline) inflation will have a distinct “V” pattern this year.”
“Measured on a year-over-year basis we expect core PCE inflation to trough in the second quarter at a rate below 1.2%, but we think it will rise to 1.6% by Q1 2016.”
“With this outlook for inflation we think it is more likely that the first interest rate increase will come in September than in June.”
Key Quotes
“One way or another, the March FOMC meeting is likely to be consequential. If the Committee is going ahead with a June “liftoff,” it will likely indicate that at the March meeting.”
“On the other hand, if the FOMC decides to take a June interest rate increase off the table, it will likely signal that in March as well.”
“To some degree, the FOMC sent mixed messages in the statement it released after its meeting earlier this week. Its description of the state of the real economy was quite upbeat, particularly given the fact that recent data have been disappointing. On the other hand, the Committee indicated that the near-term outlook has deteriorated.”
“The central tendency of the FOMC’s December forecasts for core inflation in 2015 (q4/q4) was 1.5% to 1.8%, compared to a central tendency for 2014 of 1.5% to 1.6%. We believe that core (and headline) inflation will have a distinct “V” pattern this year.”
“Measured on a year-over-year basis we expect core PCE inflation to trough in the second quarter at a rate below 1.2%, but we think it will rise to 1.6% by Q1 2016.”
“With this outlook for inflation we think it is more likely that the first interest rate increase will come in September than in June.”