Search ForexCrunch

In the view of the analysts at Bank of America (BofA), the US Federal Reserve (Fed) is expected to stand pat this week but could hike rates towards the end of this year.

Key quotes

“Expect US rates to tick a little higher toward the year-end citing an improved story (narrative) more from “meaningful progress on a coronavirus vaccine”, modest fiscal support.” 

“A key uncertainty is Fed asset purchases, look to meeting for any indication of increased buying intentions &/or switch to longer duration buying.”

“But the Fed probably won’t target rate levels.”

“If market rates riser the Fed would likely buy more USTs so as not to see a tightening of financial conditions.”