FXStreet (Delhi) – Philip Marey, Senior US Strategist at Rabobank, suggests that since they see several downside risks to the pace of the economic recovery, they currently do not expect the Fed to deliver four rate hikes in 2016, following the December hike. Key Quotes “First of all, the strength of the US dollar continues to be a major headwind for exporting firms. Secondly, the global economy continues to be weak. Note that the main US purchasing managers index for the manufacturing sector, the ISM manufacturing index, fell below the level that separates expansion from contraction in this export-oriented sector in November.” “What’s more, the downside risks to the Chinese economy going forward may be underestimated by the FOMC. We refer to the collected works of our Asia strategist Mike Every for a less complacent view of the Chinese economy. In the third place, the continuing price war in the oil market where the Saudi’s are trying to push out US shale oil producers is likely to dampen US business investment.” “While our assessment of the economic recovery going forward may seem pessimistic, we don’t have a recession in our baseline scenario for 2016. However, we noted that the current economic expansion has lasted for 75 months (as of 2015Q3), which is well past the average post WWII expansion of 58.3 months. Therefore, it could even be argued that the next recession is overdue.” For more information, read our latest forex news.