U.S. Outlook: Putting Fed tightening cycles under the microscope

Posted By Scott Anderson In Economic Outlook | No Comments

Investors are working overtime to divine not only the Federal Reserve’s next move, but how many more rate hikes we are likely to see in this cycle.

Exterior of the Federal Reserve in winter, with bare trees with loads of branches slightly obscure the building. [1]If you believe the Fed’s own forecast, there will be five rate hikes between now and the end of 2020.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on Nov. 16.

Key observations:
  • My forecast: We are expecting three more quarter-point rate hikes by the middle of 2019 and then a pause.
  • The Fed’s record of achieving a soft landing for the economy after an interest-rate tightening cycle isn’t all that good.
  • We have the FOMC starting to cut interest rates again by 2020 — a full nine months after the committee pauses.

Read my full report. [2]

NOTE: There will not be a U.S. Outlook next week; it will return on Nov. 30. Happy Thanksgiving!

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URL to article: https://changematters.bankofthewest.com/2018/11/16/u-s-outlook-putting-fed-tightening-cycles-under-the-microscope/

URLs in this post:

[1] Image: http://blog.bankofthewest.com/wp-content/uploads/2017/12/Fed_winter_crop.jpg

[2] Read my full report.: http://blog.bankofthewest.com/wp-content/uploads/2018/11/BankoftheWest_USOutlook_11_16_18.pdf

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