JPMorgan Asset Management on the FOMC meeting minutes

The wider market is mispricing the likelihood that the US Federal Reserve will raise rates again in December. While we will need to see inflation tick up for the Fed to hike, we certainly think they are in play for December. They've got a dual mandate and the other side of the equation in terms of employment and labour market is very strong. Solid US growth picture allied to the tight labour market will provide upward pressure on wages. We think it is just a matter of time and over the medium and long term we expect to see inflation to kick in. So again we expect to see the Fed hike rates in December with probably another couple of hikes next year in order to get to that zero percent real yield and then they might pause and take it from there.

17 Aug 2017 - 12:02- Fixed IncomeEconomic Commentary- Source: JPMorgan

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