17 Mar 2015
June lift-off for rates seems likely - BBH
FXStreet (Edinburgh) - The research team at BBH believes the Fed could start its hiking cycle in the June meeting.
Key Quotes
“In her Congressional testimony last month, Yellen suggested that the Fed’s patience was drawing to a close, but the removal of this guidance would not signal an immediate hike. Rather, it would signal that the Fed would decide on a meeting-to-meeting basis. This would seemingly complete the Fed’s transition from a date-dependent approach to where it wants to be - data-dependent”.
“An April rate hike remains unlikely. A couple more months of improvement in the labor market may be necessary to solidify consensual action. A number of Fed officials have identified June as a likely time frame”.
“The Federal Reserve has identified two prerequisites for a rate hike. First, it wants to see continued improvement in the labor market. This improvement is understood broadly and not simply limited to the unemployment rate. Second, the Fed needs to be confident that over the medium-term, the core PCE deflator will move toward its 2% target”.
Key Quotes
“In her Congressional testimony last month, Yellen suggested that the Fed’s patience was drawing to a close, but the removal of this guidance would not signal an immediate hike. Rather, it would signal that the Fed would decide on a meeting-to-meeting basis. This would seemingly complete the Fed’s transition from a date-dependent approach to where it wants to be - data-dependent”.
“An April rate hike remains unlikely. A couple more months of improvement in the labor market may be necessary to solidify consensual action. A number of Fed officials have identified June as a likely time frame”.
“The Federal Reserve has identified two prerequisites for a rate hike. First, it wants to see continued improvement in the labor market. This improvement is understood broadly and not simply limited to the unemployment rate. Second, the Fed needs to be confident that over the medium-term, the core PCE deflator will move toward its 2% target”.