HALISTER1: Fed’s Long-Run Median Dot Is Likely to Be Lowered: Credit Suisse

Fed’s Long-Run Median Dot Is Likely to Be Lowered: Credit Suisse

(Bloomberg) -- Fed’s long-run median dot, lowered to 3% from 3.25% at June mtg, is likely to be revised even lower in upcoming mtgs, Credit Suisse strategists Praveen Korapaty, William Marshall, Jonathan Cohn write in note.
  • “Our skepticism about an improvement in productivity growth drives our view of a persistently depressed neutral rate”
  • Lower dot would reflect “a downtrend already seen in the market-implied neutral rate”
  • Yellen’s case for a July hike “appeared half-hearted, in our view”
  • A more hike-adverse Fed “should, on the margin, be net supportive for TIPS breakevens, especially if recent signs of strength in delivered inflation continue”
  • Sentiment around June 23 U.K referendum should remain key driver of yields approaching vote
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jonathan Cohn (Credit Suisse Group AG)
William Marshall (Credit Suisse Holdings USA Inc)
Praveen Korapaty (Credit Suisse Group AG)

To de-activate this alert, click here

UUID: 7947283