Fed to stay on hold – Danske Bank

Today's most important event is the FOMC meeting, which is one of the big meetings with updated projections and a press conference explains the analysis team at Danske Bank.

Key Quotes

“Very much against consensus, we expect the Fed to stay on hold, as a data-dependent Fed should wait at least one meeting to confirm the recent weakness is only temporary but we admit that the Fed may have painted itself into the corner given the very high expectations of a hike. Instead, we expect a big announcement on how it will proceed with reducing its balance sheet ('quantitative tightening') and signalling a strong likelihood of a July hike.”

“In the US, the CPI inflation print for May is due out, which we estimate fell to 2.0% y/y form 2.2% y/y (core inflation was likely unchanged at 1.9%), so no help from the Fed here.”