10 Reasons Why The Fed Will Not Hike This Year – Danske


Brainard downed hopes of a Fed hike in September, yet the team at Danske takes another step further and lists 10 reasons for not seeing a Fed hike this year at all.

Here is their view, courtesy of eFXnews:

10 reasons why we believe the Fed will not hike this year:

1. GDP growth has slowed markedly to just around 1% q/q AR over the past three quarters – annual GDP growth declined from 3.3% y/y in Q1 15 to 1.2% y/y in Q2 16.

2. Unemployment and underemployment rates have moved sideways for some time.

3. Wage growth has picked up but is still subdued.

4. PCE core inflation has moved sideways this year – it has only been at, or above, target for five months since 2008.

5. Inflation expectations (both market-based and survey-based) have moved lower.

6. ISM is the weakest it has been since 2010 and is in easing, not hiking, territory.

7. Weak business investments as non-residential investments have declined for three consecutive quarters.

8. The Fed has already tightened monetary policy equivalent to 330bp due to QE tapering and hiking expectations.

9. Most voting FOMC members have a dovish-to-neutral stance on monetary policy, in our view.

10. Do not always believe in Fed guidance, even if the Fed seems eager to hike.

For lots more FX trades from major banks, sign up to eFXplus

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

Comments are closed.