Next Fed rate hike will come in June – RBS Economics

‘Central Bank Watch’ research note from RBS Economics says the next Fed rate hike is likely in June. 

Rationale

US GDP growth slowed to a 1.9% annualized pace in Q4/16 although broad-based improvement in domestic spending made for a better report than the headline suggested. A solid domestic economy is expected to lift GDP growth to 2.3% this year.

Solid economic data and rising inflation and wages argue for the Fed to continue gradually normalizing monetary policy this year. We expect the next rate hike will come in June.