Danske Bank analysts point out that with the moderating US growth, inflation expectations have fallen and uncertainties have increased, the Fed now says it “will act as appropriate to sustain the expansion”.
Key Quotes
“We stick to our view that the Fed will cut rates in July by 25bp and deliver a total of 75bp of rate cuts in the second half of 2019 (July, September and December). The trade war is an important risk to our outlook in both directions.”
“After two days of dovish central banks, we still see a strong case for a higher EUR/USD and lower USD/JPY as the Fed is set to ease more than other central banks.”