US Fed: Likely to take slow track for its hiking cycle - Rabobank

FXStreet (Delhi) – Philip Marey, Senior US Strategist at Rabobank, expects the FOMC to take an even slower track than they currently anticipate at least in the early years.

Key Quotes

“While unexpected developments in inflation and unemployment are the two most obvious candidates to alter the Fed’s plans, we would like to point out two less visible risk factors that may have a more persistent impact on the hiking cycle: the equilibrium real federal funds rate and the NAIRU.”

“Because the NAIRU is lower than the current FOMC projections suggest and the economic recovery is uneven and fragile, the Fed is likely to take it slow until wage pressures emerge.”