The Fed is expected to raise interest rates in December and twice more in 2018. This is the opinion of most market participants, but the central bank is not sure. The Fed may delay the raising of interest, given that inflation may not hold at 2%.
On the other hand, a change in the Fed's leadership may also affect monetary policy. This week, Donald Trump may decide whether to leave Janet Yellen in the post for another term or take a substitution.
All are unanimous about one, future interest rates will largely depend on how the US economy is performing. While the latest economic data is improving, the carefully monitored PCE (Personal Consumption Expenditure) measures below the 2% target for more than five years, despite strong employment growth. At this point, the indicator has been down sharply from 1.9% to 1.2930%.
According to the current survey, conducted between 16 and 23 October, economists do not expect growth to accelerate against the current trend, or to achieve 2% inflation before 2019.
It is these circumstances that lead to division into the Fed and raise doubts about the pace of monetary policy tightening.
Currently, the probability of interest rates rising in December is about 84%.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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