Fed rate hike coming soon – Goldman Sachs

Sandeep Kanihama FXStreet Contributor

The analysis team at Goldman Sachs explain that the recently published minutes to the May FOMC meeting mirrored the statement in downplaying the weak Q1 GDP print and the soft March inﬂation data, and also noted that most participants judged that “it would soon be appropriate” for the FOMC to hike again.

Key Quotes

“The minutes also contained new information about the eventual process for phasing out reinvestment, which will likely occur by “preannouncing a schedule of gradually increasing caps to limit the amounts of securities that could run off in any given month.” We continue to see an 80% probability of a rate hike at the June meeting and expect this to be followed by another rate hike in September and the announcement of balance sheet normalization at the December meeting. However, we see the risks to the timing of the balance sheet announcement as skewed toward the September meeting.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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