10 Jun 2015
FOMC likely to delay rate hike until December - HSBC
FXStreet (Bali) - Kevin Logan, Chief US Economist at HSBC Securities (USA) Inc. no longer thinks that conditions will be right for a Fed rate hike in September, pushing his liftoff prediction until December.
Key Quotes
"With inflation remaining low and with anticipated growth decelerating from last year, we no longer think that conditions will be right for a Fed rate hike in September. Instead we believe the FOMC will delay its first move to lift the federal funds rate until December."
"We also think a continuation of slow GDP growth will limit the number of rate hikes in 2016, and now see just two hikes in 2016 vs the three we originally expected. By year-end 2016 we expect a target range for the federal funds rate of 0.75% - 1.00%, down from our previous expectation of 1.25% - 1.50%."
"Policymakers at the FOMC will update their own projections for the future path of the federal funds rate at the upcoming 16 -17 June policy meeting. In the FOMC’s last update in March, the median projection for the end-2016 target range was 1.75% - 2.00%."
Key Quotes
"With inflation remaining low and with anticipated growth decelerating from last year, we no longer think that conditions will be right for a Fed rate hike in September. Instead we believe the FOMC will delay its first move to lift the federal funds rate until December."
"We also think a continuation of slow GDP growth will limit the number of rate hikes in 2016, and now see just two hikes in 2016 vs the three we originally expected. By year-end 2016 we expect a target range for the federal funds rate of 0.75% - 1.00%, down from our previous expectation of 1.25% - 1.50%."
"Policymakers at the FOMC will update their own projections for the future path of the federal funds rate at the upcoming 16 -17 June policy meeting. In the FOMC’s last update in March, the median projection for the end-2016 target range was 1.75% - 2.00%."