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