HALISTER1: BofAML Restores Its Call for Fed Rate Increase in December

BofAML Restores Its Call for Fed Rate Increase in December

(Bloomberg) -- While there’s “high degree of uncertainty” regarding policies President-elect Trump will implement, outlook depends on financial conditions/confidence “and so far, so good,” BofAML economists led by Ethan Harris write in note Friday.
  • BofAML returns to pre-election day view and now expects Fed to hike in December
  • NOTE: On Nov. 9, day after election, BofAML had seen December hike as “more challenging” with a Trump victory, said Fed is more likely than not to postpone; also lowered its forecast for hikes between now and end of 2017 to one from three
  • Results of election will slow growth in 1H of 2017, yet underpin economy in 2H and into 2018
    • BofAML revises down its GDP growth forecast by 0.5% for 1Q and 2Q 2017, raises forecast by 0.5% for 3Q and 4Q
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Ethan Harris (Bank of America Corp)

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