FXStreet (Edinburgh) – Strategist at Westpac Robert Rennie still expects the Federal Reserve to hike rates twice this year, with the first one in September.
Key Quotes
“While each successive rally in bond markets/ sell off in stocks was becoming more and more muted, Monday morning’s attempt at a rally was far from impressive”.
“So it does feel as if markets have already started to move on here to price the next big risk event i.e. FOMC lift-off”.
“Chair Yellen certainly did no harm and if anything her comments were a shade more hawkish than we have been accustomed too, especially when she noted that, “we now think that the economy can not only tolerate but needs higher rates”.
“She again noted that “what matters for financial conditions and the broader economy is the entire expected path of interest rates, not any particular move, including the initial increase, in the federal funds rate”.
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