Fed on path to raise rates this year? - Scotiabank

FXStreet (Guatemala) - Derek Holt and Dov Zigler, analysts at Scotiabank explained that they think that the Fed wants to commence a hike cycle before year end.

Key Quotes:

"The March FOMC statement and ensuing press conference downgraded the Fed’s assessment of the economy and its expected pace and path of policy firming."

"Subsequent remarks from Fed Chair Yellen further implied that the Fed intends to be cautious in its normalization of rates, and that it distinguishes between lifting rates off of zero and raising rates to its view of the medium-run neutral rate."

"We think that the Fed wants to commence a hike cycle before year end but that it doesn’t want markets to immediately pull forward a whole cycle’s worth of hikes in such fashion as to cause term yields to rise and potentially short circuit the recovery."