16 Mar 2016
FOMC preview: Fed set to keep door open for a June hike – Danske Bank
Research Team at Danske Bank, expects the Fed to keep the Fed funds target rate unchanged at 0.25-0.50% at today’s FOMC meeting (announcement at 19:00 CET).
Key Quotes
“As this is widely expected, focus should quickly shift towards the updated projections for the Fed funds target rate (the so-called ‘dots’). We expect the Fed to signal two or three hikes this year (down from four) and four hikes next year (unchanged). The Fed wants to keep the door open for a June hike.
Our main scenario is that the Fed will stay on hold until September but the probability of a move in June and that the Fed will tighten monetary policy more than once in 2016 has increased due to the rebound in risk sentiment, continued improvement in the labour market and higher PCE core inflation.
Markets have repriced the Fed and now expect two and half hikes by December 2017.”
Key Quotes
“As this is widely expected, focus should quickly shift towards the updated projections for the Fed funds target rate (the so-called ‘dots’). We expect the Fed to signal two or three hikes this year (down from four) and four hikes next year (unchanged). The Fed wants to keep the door open for a June hike.
Our main scenario is that the Fed will stay on hold until September but the probability of a move in June and that the Fed will tighten monetary policy more than once in 2016 has increased due to the rebound in risk sentiment, continued improvement in the labour market and higher PCE core inflation.
Markets have repriced the Fed and now expect two and half hikes by December 2017.”