Fed future rate hike expectations pushed further ahead – NAB

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    Tony Kelly, Senior Economist at NAB, suggests that they have pushed out their expectation of the next Fed funds rate hike from June quarter 2016 to September quarter 2016.

    Key Quotes

    “In the light of recent developments in financial and commodity markets, we have changed our view on the likely path of the federal funds rate. Our revised projection calls for a slower pace of increases earlier on and also lowers the expected peak rate.

    This is in the light of the recent tightening in financial conditions, an expectation that bouts of financial volatility are unlikely to go away soon, and further indications that inflation expectations are falling, all of which will induce Fed caution.

    We have also slowed the pace of increases through to mid-2017 and lowered our expectation of the peak fed funds rate in this tightening cycle to 3.0%.”
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