Fed not to hike until December, but wages set to rise - Scotiabank

For the months ahead, analysts at Scotiabank explained that they expect the Fed to hold back on another rate increase until its final meeting of the year in December.

Key Quotes:

"As the FOMC watches and waits for a bounce-back in growth and inflation, amid what most officials consider transitory, one-off “idiosyncratic factors” that have kept prices in check, eyes have turned to signals from the Committee regarding the date by which it will begin scaling back its balance-sheet reinvestments."

"Details on policy normalisation were outlined at the June meeting and the FOMC remarked in its July statement that the anticipated change in reinvestments will kick off “relatively soon”, which may imply a September start. Q2 growth figures showed a modest improvement in the US economy and are supportive of the country’s labour market: with the unemployment rate at a 16-year low of 4.3%, we expect to see an uptick in wage growth in the months ahead."