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FOMC reaction: Another Hike In September Before Balance Sheet

The Fed followed through with raising rates and even sounded optimistic. The US dollar recovered also on Yellen’s dismissing of inflation. What’s next? Here is a hawkish reaction:

Here is their view, courtesy of eFXnews:

CIBC Research comments on today’s FOMC decision noticing that the Fed took what it was given, raising interest rates by 25bp as expected despite a soft run of economic data recently.

“And even though the Fed admitted that  inflation had “declined recently” it doesn’t appear too concerned at this stage regarding that trend and still expects inflation to normalize near its 2% target in the medium term, although it is monitoring it “closely”…

Overall, nothing here to change our forecasts for  another hike in September and then the balance sheet unwind to start later in December,  given little apparent concern  regarding the recent weak data.  As per  last time, there was only one dissenter against the rate hike,” CIBC argues.

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Yohay Elam

Yohay Elam

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 a 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.