FX Research Why the FOMC should raise rates, but won’t
Highlights
• The FOMC has a history of being reactive to inflationary pressure and we expect that this trend is unlikely to change. The Fed should raise rates in September, but won’t.
• Inflation expectations are stable just shy of the Fed’s target. Rising wages could pose a risk to the Fed’s credibility as we expect inflation to continue to rise in Q4.
• Currency market is positioned for ‘no hike’. We expect the US Dollar to strengthen against G10 currencies in the coming year as rate differentials widen.
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ETF Securities Research team
ETF Securities (UK) Limited
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The analyses in the above tables are purely for information purposes. They do not reflect the performance of any ETF Securities’ products . The futures and roll returns are not necessarily investable.
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