The FOMC will not pivot this year – Rabobank
|The FOMC unanimously decided to raise the target range for the federal funds rate by 25 bps to 4.75-5.00% from 4.50-4.75%. Economists at Rabobank remove the June rate hike of 25 bps from their forecasts. However, they still believe that the Fed will keep rates unchanged for the remainder of the year.
Fed to raise the FFR one more time and keep it there for the remainder of the year
“The FOMC unanimously decided to raise the target range for the federal funds rate by 25 bps. However, the FOMC does not want to go much higher and expects only one more 25 bps rate hike this year. Instead, the FOMC expects credit tightening by banks to do the rest of the inflation fighting for the central bank. During the Q&A you could easily get the idea that credit tightening is the Fed’s new monetary policy tool.”
“We lower our forecast for the target range of the fed funds rate to 5.00-5.25% from 5.25-5.50%. In other words, we now expect only one more hike of 25 bps instead of two. However, we stick to our forecast that the FOMC will not pivot this year.”
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.