HALISTER1: Fed Still in Wait-and-See Mode; Don’t Focus on the Dots: UBS

Fed Still in Wait-and-See Mode; Don’t Focus on the Dots: UBS

(Bloomberg) -- Market’s response to increase in Fed’s expected number of rate hikes may be “self defeating” if financial conditions tighten in response to FOMC’s shifting dots, via rates and/or USD, UBS economists Drew Matus, Samuel Coffin and Dave Liang write.
  • “Don’t focus on the dot forecast,” which Yellen described as a “very modest” shift
    • Dots should be viewed alongside statement, which said FOMC thought “only gradual” increases would be needed
    • UBS sees two rate hikes in 2017
  • Lack of a shift in Fed’s economic forecasts implies that policy makers are taking a “wait and see attitude” on fiscal/govt policy changes
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Drew Matus (UBS Asset Management Japan Ltd)
Samuel Coffin (UBS Global Asset Management Japan Ltd)
David Liang (UBS Securities LLC)

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