Analysts at Wells Fargo believe the Federal Reserve will not raise rates until at least 202 and possibly longer. Higher inflation surprises could change the outlook. They see a GDP growth of around 30% during the third quarter (annualized).
“We still look for the year-over-year rate of PCE inflation to remain below 2% for quite some time.”
“We still look for a gradual recovery in the labor market and forecast the unemployment rate to be below 6% at the end of 2021 and under 5% by the end of 2022.”
“A modest upward revision to real GDP growth in 2020 was partially offset by a small downward revision to 2021. Data for Q3 GDP growth is reported on October 29 and appears likely to come in right around 30%. Our current forecast is 28.6%.”
“In light of the Fed’s new policy strategy (average inflation target regime), our baseline forecast for subdued inflation leads us to believe the FOMC will not raise rates until at least 2023, and possibly longer, unless inflation materially surprises to the upside”.
“Our year-end targets for the 10-year Treasury yield are unchanged at 0.85% for 2020 and 1.30% for 2021.”
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.