Fed widely expected to increase interest rates – Lloyds Bank

The US Federal Reserve (Wed) will decide on policy today and is widely expected to increase interest rates for the third time this year, to 1.5%, according to analysts at Lloyds Bank.

Key Quotes

“It also seems likely to confirm its previously announced path for gradually running down the asset holdings built up as a result of QE. Of more interest will be potential signals for policy in 2018 and beyond. We anticipate the updated ‘dot plot’ will reaffirm policymakers’ expectations of three further rate increases next year.”

“The post-meeting press statement and Fed Chair Janet Yellen’s press conference will also provide some guidance on the 2018 outlook. Overall, we anticipate the Fed to reiterate that they expect economic conditions “will warrant gradual increases” in policy rates. Data wise, the key releases are CPI inflation (Wed) and retail sales (Thu), both of which are forecast to have been boosted by higher gasoline prices.”