Back
26 Apr 2016
US: View on 2016-17 remains constructive - Westpac
Research Team at Westpac, suggests that the Fed faces a shifting mix of risks with a softening growth pulse and concerns around global financial instability, weak external demand and a high USD currently dominating.
Key Quotes
“The view on 2016-17 remains constructive though. We expect the balance of risks to swing back towards labour market tightness and associated inflation pressures in coming months – the FOMC’s April meeting will need to clearly signal a shift though to confirm our forecast of a June hike.
More generally, the Fed’s ‘asymmetric’ ability to respond favours a continued cautious approach to policy moves that, combined with recurring stability concerns in China, is likely to generate a ‘rolling’ pattern of risk moves in key markets.”
Key Quotes
“The view on 2016-17 remains constructive though. We expect the balance of risks to swing back towards labour market tightness and associated inflation pressures in coming months – the FOMC’s April meeting will need to clearly signal a shift though to confirm our forecast of a June hike.
More generally, the Fed’s ‘asymmetric’ ability to respond favours a continued cautious approach to policy moves that, combined with recurring stability concerns in China, is likely to generate a ‘rolling’ pattern of risk moves in key markets.”