27 Apr 2015
September Fed rate hike most likely scenario – Goldman Sachs
FXStreet (Barcelona) - According to the Research Team at Goldman Sachs, a September Fed rate hike would be the most likely scenario, with December being a close call too, while expecting the April FOMC meet to be non-event.
Key Quotes
“Our economists do not expect any substantial shift in the language of the FOMC statement with respect to guidance on the path of policy rates, but believe that minor, mainly factual, changes could be introduced in the description of the state of the economy. For example, given the disappointing March employment report, the reference to “strong job gains” could be moderated.”
“Similarly, since the inflation trend has remained stable, the reference that “inflation has declined further” could also be adjusted.”
“Chair Yellen has said that a rise in the federal funds rate “could be warranted” any time after the April meeting. Thus, a potential source of dovish surprise would be if the statement rolls forward the reference that an increase in the federal funds rate remains unlikely at the April FOMC to the June FOMC meeting. This is not our expectation, although our US Economics team still views the September 16-17 FOMC meeting as the most likely date for the first hike, and a close call with December.”
Key Quotes
“Our economists do not expect any substantial shift in the language of the FOMC statement with respect to guidance on the path of policy rates, but believe that minor, mainly factual, changes could be introduced in the description of the state of the economy. For example, given the disappointing March employment report, the reference to “strong job gains” could be moderated.”
“Similarly, since the inflation trend has remained stable, the reference that “inflation has declined further” could also be adjusted.”
“Chair Yellen has said that a rise in the federal funds rate “could be warranted” any time after the April meeting. Thus, a potential source of dovish surprise would be if the statement rolls forward the reference that an increase in the federal funds rate remains unlikely at the April FOMC to the June FOMC meeting. This is not our expectation, although our US Economics team still views the September 16-17 FOMC meeting as the most likely date for the first hike, and a close call with December.”