Peter A Rosenstreich
Swissquote Bank Ltd
The US Federal Open Market Committee 12-13 June meeting will be critical. Not only will there be a decision on policy strategy, but Summary of Economic Projections and a press conference by Fed Chair Powell. It's universally expected the Fed will hike rates by 25bp at this meeting, to be followed by two additional hikes in September, bringing the total for 2018 to three. In light of US economic outperformance, after a slow 1Q, there's been a growing expectation of tighter monetary policy. In response, US yields have rallied with 10-year yields climbing above 3.0%, with the USD benefiting from the higher interest rate. Yet, in recent meeting minutes, the Fed gave no indication that they would increase the pace of tightening. Instead they indicate a willingness to allow the inflation rate to rise above 2% for a "temporary period," while the economy continues to grow.
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This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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