FOMC to end its hiking cycle after the yield curve inverts in 2019 - Rabobank

Eren Sengezer FXStreet

"We think that the most likely scenario is that the FOMC will end its hiking cycle after the yield curve inverts in 2019," note Rabobank analysts.

Key quotes

"While our earlier Fed calls reflected our expectation that the Fed would see the downside risks to the economic outlook and proceed cautiously, it appears that the FOMC has become overconfident and can now only be stopped by a major economic setback or a strong market signal."

"While the majority in the FOMC interprets inversion as a sign of monetary policy entering restrictive territory, we think that it is more likely a warning signal of a recession."

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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