FOMC Is Likely to Hike in Dec., Twice in 2017: UBS
(Bloomberg) -- FOMC should move rates higher gradually as it attempts to balance international concerns, mkt expectations and evolving economy, UBS economists Drew Matus, Maury Harris, Samuel Coffin and Dave Liang write in note.
- Fed may soon meet its dual mandate
- Economy will continue to modestly expand; growth should be driven by healthy U.S. consumer
- Unemployment likely to decline further even as payroll gains slow; participation rate should remain near current level, implying a breakeven payroll gain of below 100k
- Rate of core inflation should outpace total inflation over next few qtrs, helped by fading impact of steep energy price declines and “gentle” push of wages
- Longer-term, Fed to begin to let some UST holdings roll off roughly 2 qtrs after fed funds rate reaches 1%
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Drew Matus (UBS Asset Management Japan Ltd)
Maury Harris (UBS Asset Management Japan Ltd)
Samuel Coffin (UBS Global Asset Management Japan Ltd)
David Liang (UBS Securities LLC)
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