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1 Sep 2015
Fed’s lift-off in September remains a chance – Deutsche Bank
FXStreet (Edinburgh) - According to Analyst at Deutsche Bank jim Reid, the probability of the Federal Reserve hiking rates next month has been ticking higher in recent days.
Key Quotes
“That probability edged up to 42% yesterday from 38% on Friday, although still tracking below the 54% we saw earlier this month”.
“On this theme, yesterday DB’s Peter Hooper reiterated his September liftoff view but noted that the call is very close at this point”.
“Peter believes that there are three key factors which will drive the outcome; fundamental economic developments and prospects (including upcoming data), financial market conditions and thirdly Fedspeak”.
“In his view the strongest case for delaying is uncertainty about inflation prospects, however this is somewhat offset by progress in the labour market”.
“On top of this, recent financial turbulence and global uncertainties make this a close call and caution may dictate accumulating more evidence in the wake of market gyrations”.
“Looking forward, Peter notes that assumptions for a good August employment report, no significant weakness in the August CPI report and markets settling down following the equity volatility of late should help support his September call”.
“However, should these assumptions prove wrong, then the schedule could well slip to December or even 2016”.
Key Quotes
“That probability edged up to 42% yesterday from 38% on Friday, although still tracking below the 54% we saw earlier this month”.
“On this theme, yesterday DB’s Peter Hooper reiterated his September liftoff view but noted that the call is very close at this point”.
“Peter believes that there are three key factors which will drive the outcome; fundamental economic developments and prospects (including upcoming data), financial market conditions and thirdly Fedspeak”.
“In his view the strongest case for delaying is uncertainty about inflation prospects, however this is somewhat offset by progress in the labour market”.
“On top of this, recent financial turbulence and global uncertainties make this a close call and caution may dictate accumulating more evidence in the wake of market gyrations”.
“Looking forward, Peter notes that assumptions for a good August employment report, no significant weakness in the August CPI report and markets settling down following the equity volatility of late should help support his September call”.
“However, should these assumptions prove wrong, then the schedule could well slip to December or even 2016”.