Fed to hike in Dec – Rabobank

FXStreet (Guatemala) – Analysts at Rabobank predict a Fed hike is required this year, most likely December though.

Key Quotes:

“The second estimate of Q2 US GDP came out at 3.7%, well above the first estimate of 2.3%. The most conspicuous revision was the 3.2% expansion of business investment, instead of a 0.6% contraction in the first estimate. This suggests that the negative impact of the strong dollar and the low oil price on business investment already faded in Q2, after subdued spending in 2014Q4 and 2015Q1.”

“Combined with the strong durable goods orders published earlier this week, business investment appears to be back on track. While the impact of the events in August are not yet visible in these data, it appears that the US economy was on a balanced growth path going into this month. Although the inflation outlook is likely to delay the Fed’s first rate hike beyond September, the domestic momentum of the US economy supports our view that the first hike will take place before the end of the year, most likely in December.”

Analysts at Rabobank predict a Fed hike is required this year, most likely December though.

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