Halister News

(Bloomberg) -- A June rate hike remains unlikely given Brexit vote and Yellen recently saying that “caution is especially warranted” in adjusting policy, Renaissance Macro Research economist Neil Dutta writes in note.

• Fed will also need several mos. of data before determining whether weak 1Q was a “fluke”
• Tone of FOMC statement released this wk should be “neutral” relative to last mo.’s, will weigh continued U.S. growth against risks abroad
  • Will likely be mostly a “carbon copy” of statement in March
• 2nd paragraph will be “utmost importance”; question is whether policy makers say global economic/financial developments still pose risks
  • Fed needs to find language that notes recent improvement in global economic data, yet conveys that “we are not out of the woods yet”
• Mkt reaction should be “fairly muted”
  • Renaissance continues to see low chance of June hike, doesn’t expect “strong signal” about one this wk; expects 2 hikes this yr, in Sept. and Dec.