FXStreet (Delhi) – Signe Roed-Frederiksen, Senior Analyst at Danske Bank, expects the US Fed to leave rates unchanged in this week’s monetary policy meet due to the global uncertainty.
Key Quotes
“We believe the recent tightening in financial conditions and increased uncertainty on global growth will sway the Fed to keep rates unchanged, despite a strong labour market and solid domestic demand.”
“Fed Chair Yellen should make it clear that the FOMC is ready to hike this year if global developments do not push the US economy off course.”
“The median fed funds rate dots are likely to be lowered to reflect just one rate hike this year and a hiking pace of 100bp per year in the following two.”
“The projected unemployment rate should be lowered for this year and the following two. If the NAIRU estimate is taken down in a similar way this is likely to be taken as a dovish signal by markets.”
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