Fed: Diminishing rate odds? - ING

According to analysts at ING, we may require a mighty turnaround in US data over the coming months to convince the FOMC to raise rates in December; this is becoming increasingly unlikely and judging by more muted Fed comments, it seems that US policymakers are also losing faith.

Key Quotes

“Add to this ongoing US political uncertainty – where the temporary debt ceiling extension has merely kicked the can down the road into early 2018 – and we fear that markets could still shift to the idea that any “pause” in the Fed’s tightening cycle will be fairly lengthy (if not permanent). Another set of disappointing US data releases, while not our base case, would deliver final nail in the coffin for a Dec Fed rate hike.”