HALISTER1: Credit Suisse Moves Call for Next Fed Hike to March From June

Credit Suisse Moves Call for Next Fed Hike to March From June

(Bloomberg) -- Credit Suisse economists led by James Sweeney change their call for next Fed rate increase to March from June, yet say a move is “hardly assured”; they maintain expectation for three hikes between now and February 2018.
  • Three factors have changed likely path of U.S. rates: core inflation has risen more than expected, data have been consistent with strong global growth momentum, and Fed rhetoric is becoming increasingly hawkish
    • Factors that might avert a March hike include sluggish income growth and unremarkable real retail sales, industrial production and core PCE inflation
  • Market’s rising implied probability of a March hike “could be self-fulfilling” because it undercuts claims that Fed needs a meeting to prepare public for a move
  • CS doesn’t expect Yellen or Fischer on Friday to disavow recent hawkishness from Fed presidents
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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James Sweeney (Credit Suisse Group AG)

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