US: Two More Rate Hikes in the Cards This Year

U.S. Review

Two More Rate Hikes in the Cards This Year

The Federal Reserve raised its short-term target rate 25 bps at its March FOMC meeting, with one dissent. Median projections were largely unchanged and still point to three hikes in 2017 and 2018. We expect some political uncertainty to seep in ahead of the June meeting.

Headline and core nominal retail sales grew only marginally in February, suggesting a below-trend pace in personal consumption in Q1. Much of the slower pace can be attributed to a delay in tax refund payments. The severe snowstorm that hit the Northeast and parts of the Midwest is expected to pull some seasonally-sensitive monthly indicators lower in March.

Global Review

Bank of England Keeps Rates Unchanged

As largely expected, the Bank of England (BoE) voted in favor of keeping monetary policy unchanged at 0.25 percent at its meeting this week. Minutes from the meeting showed that the vote was non-unanimous with one dissenter voting to increase rates to 0.50 percent.

Strong Start to the Chinese New Year

Data this week showed that China’s economy started the year off on solid footing. China’s fixed-asset investment and industrial production bested market expectations, while retail sales grew slower than expected due to weakness in auto sales.

Download the full report