Fed Review: Front-loading to continue despite growth risks

Danske Research Team Danske Bank A/S

As expected by both the analyst consensus and the markets, the Fed hiked the target range by 75bp to 2.25-2.50%.

With inflation pressures still strong and broad-based, we continue to see risks tilted towards more front-loading, and adjust our Fed call to expect a 75bp hike in the September meeting, followed by 25bp in November and December.

With both Fed Funds rate and real yields now around neutral, Fed will take more meeting-by-meeting with regard to the future rate hikes, which leaves the outlook for hikes later in the year very uncertain.

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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