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JP Morgan expects only two Fed hikes in 2017
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Loading...A stronger dollar, lower inflation and a more dovish U.S. Federal Reserve may lead the central bank to increase interest rates twice in 2017, JP Morgan said in a report.
President-elect Donald Trump and his economic stimulus policies could be the catalyst for the first hike of 25 points in June and another one in December.
"If those policies in the first 100 days are relatively market-friendly, then we would expect the signal at the March and May meetings to reinforce expectations for a hike by midyear, and we continue to expect rates to be lifted another 25bp (basis points) at the June meeting," JP Morgan said.
JP Morgan has forecast growth of 1.9 percent in 2017 and 1.8 percent in 2018, but such figures do not include the potential impact that ending trade deals might have on the U.S. economy.
Trump, who is taking office on January 20, has said he wants to rip up a trade deal with Asian-Pacific countries, renegotiate the North American Free Trade Agreement and impose tariffs of 45 percent on Chinese goods.
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