Fed: On hold for now but may be forced to cut again – Danske Bank
|Danske Bank analysts suggest that on the back of the Fed's new 'wait-and-see' approach and the better-than-expected October jobs report, they now expect only one more cut in 3-6M (previously three more cuts) from the US Fed.
Key Quotes
“The timing of the cut is difficult but, as the Fed wants to see how things play out, the March meeting is probably the earliest possibility. Most FOMC members (including the doves) have said they think the current policy stance is appropriate and that it would take a further deterioration of data to make further cuts.”
“We keep a cut in our forecast profile, as we still believe the US economy is more fragile than the Fed believes and that the renewed trade optimism is unlikely to be enough to trigger a rebound in business investments just yet. Most soft indicators on investment intentions signal a further decline in business investments.”
“In our view, we need a more permanent deal for investments to kick off again (we assign a 50% probability of this happening). The world economy also looks fragile, in particular in Europe, despite the early signs of stabilisation in China.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.