Ik stuitte net op een interessant stuk.. Ben bang dat de FED pas in december de rente zal verhogen...
This Thursday’s FOMC decision is the most eagerly awaited in years – marking the possibility of the first tightening of policy for over 9 years.
· We narrowly expect the Fed to leave rates unchanged at this meeting…but this is a very close call.
· If the Fed holds fire, we think they will make it very clear that a hike is imminent (October cannot be ruled out – despite no scheduled press conference) and would require some actively bad news to prevent or postpone tightening in the near future.
· Another novel approach, and one that has not received much consideration, is a smaller than 25bp hike (say 12.5bp) – this could be seen as both “cautious”, but also address the concerns of those worried that the Fed is falling behind the curve.
· As important as the rate decision itself, is the message the Fed conveys about future tightening, as there is currently a wide divergence between their rhetoric, and the rates implied by the dot diagram.
· If the Fed leaves rates in September, hints at October, and sounds a soothing note about the future, then the market reaction is likely to be limited – some rise in the front end of the yield curve, and some modest USD strengthening.
· But if they do hike (including a <25bp move), even with some soothing forward guidance, then we would likely see a stronger front-end response, and bigger USD gain – either way the direction is the same, only the magnitude differs.
· A 25bp September hike, unless accompanied by a credible commitment to caution, is not likely to be a positive environment for EM assets, stocks or credit.