Halister News

(Bloomberg) -- Recent Fed communications, history and central bank independence all indicate policy makers won’t be deterred from raising rates due to presidential election, BofAML’s Mark Cabana, Michael Hanson write in note.

• Assuming there’s enough progress to warrant another increase, Fed would only delay if Nov. election coincided with heightened economic uncertainty that affects outlook or leads to material tightening of financial conditions
• Of last 5 Fed hiking cycles, 4 either began during or continued into election yr
• If Fed wanted to minimize political pressure, “it is not at all obvious” what policy it should pursue; any action or inaction is “bound to upset” at least one political party
• BofAML still expects Fed to hike in Sept., “if not sooner”