7 Jan 2015
Morgan Stanley: Fed may hike rates in early 2016, not before – eFXnews
FXStreet (Barcelona) - The eFXnews Team shares that Morgan Stanley anticipates the Fed to hike interests rates in first quarter of 2016 and not in mid-2015, further expecting today’s FOMC minutes to be support this view.
Key Quotes
“Our US economist’s call for the Fed hiking interest rates in 1Q16 and not in mid-2015 as projected by the rest of the forecast community seems to be well on track and should receive another credibility boost by the release of the Fed minutes today.”
“Yes, the December 17 Fed statement was hawkish, reflecting better US growth data, but since December commodity prices have declined markedly with oil breaking below the bear case projection of our oil analysts, suggesting US and global inflation rates could fall.”
“Given current pricing of oil and gas, our economists expect US headline inflation to drop into negative territory in January. There is an increasing risk that headline US inflation in most of 2015 could stay negative and temporary downward pressure for core inflation too.”
Key Quotes
“Our US economist’s call for the Fed hiking interest rates in 1Q16 and not in mid-2015 as projected by the rest of the forecast community seems to be well on track and should receive another credibility boost by the release of the Fed minutes today.”
“Yes, the December 17 Fed statement was hawkish, reflecting better US growth data, but since December commodity prices have declined markedly with oil breaking below the bear case projection of our oil analysts, suggesting US and global inflation rates could fall.”
“Given current pricing of oil and gas, our economists expect US headline inflation to drop into negative territory in January. There is an increasing risk that headline US inflation in most of 2015 could stay negative and temporary downward pressure for core inflation too.”