FXStreet (Guatemala) – Analysts at Rabobank explained that the developments in August are not likely to have boosted the Fed’s confidence in the inflation outlook.
Key Quotes:
“The slowdown of the Chinese economy, the devaluation of the yuan against the US dollar, and the worldwide decline in commodity prices could further delay the return of US inflation to its 2% target. This makes a September rate hike by the Fed decreasingly likely.”
“At the same time, the negative impact of last year’s decline in oil prices and rise of the dollar on US business investment appears to have faded. Domestic growth has become more balanced and continues to have sufficient momentum. Therefore, we do expect the Fed to hike before the end of the year, most likely in December.”
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