Fed: Market had downgraded the chances of a hike next week - BBH
Research Team at BBH, suggests that the market has not changed its mind and following Brainard's recent comments, the market had downgraded the chances (which were already modest) of a Fed hike next week.
Key Quotes
“Maybe the suggestion that a 25 bp hike in the target range somehow would make the Federal Reserve imprudent, incautious or impatient is a bit much.
It is premature to make a hard conclusion. However, investors should be open to the possibility that the sell-off in asset prices in the US, and especially the backing up of US interest rates and the steepening of the yields curve, may be a protest against such easy monetary policy in the US. That hypothesis seems to be a corollary to the idea that monetary policy in Japan and Europe is maxed out, if not in terms of the lowest rates can go into the phantom-zone below zero and amount of assets that can be bought, then as a function of the political will of policymakers.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
