U.S. Outlook: FOMC scales back rate hike expectations

Scott Anderson
Posted by Scott Anderson
Chief Economist

This week the Federal Open Market Committee (FOMC) aligned its expectations for the Fed funds target rate lift-off more closely with the market’s.

Graph showing recent drop in U.S. exportsThe implication is that the FOMC blinked a bit, giving in to market guidance on interest rates.

For a detailed look at this and other developments this week, see my full analysis. Highlights are outlined below, followed by a link to the full U.S. Outlook report, delivered on March 20.

Key observations:
  • While the first rate hike from the Fed could theoretically come in June, September is looking more likely given the revised “dot-plot” guidance from the Fed.
  • The major trade weighted dollar index is now approaching 12-year highs.
  • In less than a month, the dollar has gained nearly 8% against the euro.
  • With global oil prices yet to find a bottom, low inflation could remain longer than currently anticipated.

Click here to read my full report.

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