mercredi 18 mars 2015
Forget 2015: Morgan Stanley is now convinced rate hikes won't happen this year
Posted on 20:06 by nice news
Before Wednesday, most economists were debating whether the Federal Reserve would begin hiking interest rates in June or September.
But following the conclusion of its Federal Open Market Committee meeting, the Fed communicated enough concern for the economy that economists now think rates hike are more likely to come later.
Some economists were left feeling more emboldened about the calls for a later hike.
"Our forecast remains for a September hike, but the risks now appear slightly skewed toward a later liftoff," Goldman Sachs' Jan Hatius said.
Morgan Stanley's Ellen Zenter goes much further.
Based on her reading of the economic data, which the Fed has said it is dependent on, makes lift off this year unlikely. Here's the key portion from her note Wednesday:
"We maintain our expectation that the Fed will err on the side of caution and take to heart the asymmetric risks to tightening policy too early when at the zero lower bound. We see persistently low core inflation as the main stumbling block for those on the Committee that want to become more confident that this period of lowflation does indeed turn out to be transitory. With our expectation that core inflation falls further from goal,and the lingering threats to growth and inflation from the rapid appreciation of the US dollar, we look for the Fed to forego rate hikes this year."
Read more: http://ift.tt/1BXQL7o
But following the conclusion of its Federal Open Market Committee meeting, the Fed communicated enough concern for the economy that economists now think rates hike are more likely to come later.
Some economists were left feeling more emboldened about the calls for a later hike.
"Our forecast remains for a September hike, but the risks now appear slightly skewed toward a later liftoff," Goldman Sachs' Jan Hatius said.
Morgan Stanley's Ellen Zenter goes much further.
Based on her reading of the economic data, which the Fed has said it is dependent on, makes lift off this year unlikely. Here's the key portion from her note Wednesday:
"We maintain our expectation that the Fed will err on the side of caution and take to heart the asymmetric risks to tightening policy too early when at the zero lower bound. We see persistently low core inflation as the main stumbling block for those on the Committee that want to become more confident that this period of lowflation does indeed turn out to be transitory. With our expectation that core inflation falls further from goal,and the lingering threats to growth and inflation from the rapid appreciation of the US dollar, we look for the Fed to forego rate hikes this year."
Read more: http://ift.tt/1BXQL7o
Forget 2015: Morgan Stanley is now convinced rate hikes won't happen this year
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