Société Générale: Three more Fed hikes before a holding spell

According to  Société Générale analysts, the US Federal Reserve is likely to undertake three more rate hikes before hitting a holding pattern.

Key highlights

SG analysts are noting that a December rate hike from the Fed is almost a sure thing, while two more rate hikes are likely to follow in the first half of 2019 before the Fed goes dark on rates in H2 2019.

According to SG, the impact of the US’ fiscal stimulus is waning steadily, while both economic growth and inflation are beginning to moderate.

On employment, SG notes that steadily-rising employment figures are expected to continue into 2019, putting pressure on wages, which will, in turn, weigh on corporate profits, which is expected to be followed by a mild downturn in US economic activity, with the expectation that the domestic US economy will slip into a recession by H1 of 2020.