14 Jul 2014
Fed rate hike sooner than expected? - BTMU
FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, sees a probable rate hike by the Fed sooner than anticipated.
Key Quotes
"A slowdown in the potential growth rate of the US economy may have two important implications for US monetary policy".
"Firstly, there may now be less economic slack than estimated by the Fed arguing in favour of earlier rate hikes."
"Secondly, the neutral policy rate will also likely be lowered implying that the Fed may need to raise the Fed funds rate by less".
"The Fed’s estimate of the longer run Fed funds rate has already been lowered to 3.75% from 4.00% at the end of last year."
Key Quotes
"A slowdown in the potential growth rate of the US economy may have two important implications for US monetary policy".
"Firstly, there may now be less economic slack than estimated by the Fed arguing in favour of earlier rate hikes."
"Secondly, the neutral policy rate will also likely be lowered implying that the Fed may need to raise the Fed funds rate by less".
"The Fed’s estimate of the longer run Fed funds rate has already been lowered to 3.75% from 4.00% at the end of last year."