FXStreet (Córdoba) – According to analysts from Danske Bank the Federal Reserve Bank will rise rates on Wednesday and also three times during 2016 (less than previously expected).
Key Quotes:
“We have changed our forecasts and now expect the Fed to hike three times in 2016 and four times in 2017 (previously four hikes both years), i.e. a total of eight hikes from now until year-end 2017 (down from nine previously).”
“The reason we now expect one hike less next year is due to US activity data having surprised on the downside recently and the poor risk environment (especially the low oil price). We still see a risk of the Fed coming behind the curve but we do not expect this theme to materialise before H2 16 at the earliest.”
“We continue to believe that the markets underestimate the number of hikes going forward; thus, there is room for short-term yields to rise. Therefore, our forecasts for US rates remain above the forward market but we see most of the increase happening later in the spring of 2016.”
(Market News Provided by FXstreet)