RESEARCH ROUNDUP: Fed Hike Outlook ‘in Tatters’ Post-Brexit
Source: BFW (Bloomberg First Word)
People
Rob Carnell (ING Groep NV)
Carsten Klude (Mm Warburg Investment Research)
Cliff Tan (Bank of Tokyo-Mitsubishi UFJ Ltd/The)
David Doyle (Macquarie Group Ltd)
Ethan Harris (Bank of America Corp)
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UUID: 7947283
(Bloomberg) -- Any “faint prospect” of a Fed July rate increase has entirely vanished, ING economist Rob Carnell wrote in note; longstanding ING call for Sept. hike looks to be “hanging in tatters.”
Alert: HALISTER1- More commentary below about U.S. monetary policy outlook following outcome of U.K. referendum.
- Fed funds futures price 1st rate hike to 0.50%-0.75% range as more than likely for Nov.-Dec. 2017 as of Fri., compared with Jan. 2017 at Thur.’s close
- Global mkts roiled by Britain’s vote to leave EU; GBP fell to lowest in more than 30 yrs and stocks tumbled, while demand rose for haven assets
- BofAML (Ethan Harris, others)
- Next Fed hike now seen in Dec., not Sept.
- Brexit vote is another in “long string of confidence shocks,” will reduce U.S. GDP by an est. 0.2ppts over next 6 qtrs
- Story link
- BoT-Mits (Cliff Tan)
- Brexit will tighten financial conditions, mkt reaction is going to possibly be “pretty severe” over next few trading days
- Story link
- Janus Capital (Bill Gross)
- Fed’s dots have no future relevancy
- Brexit was storming of the gates of finance by populists
- Story link
- JPMorgan (Michael Feroli)
- Fed now seen hiking in Dec., not Sept.
- There’s “exceptionally low visibility” on monetary policy outlook now
- Story link
- Macquarie (David Doyle, Brendan Livingstone)
- Fed could need mos. to get clear picture about Brexit’s effect on global outlook
- Unlikely to be full clarity before Sept.
- Story link
- Renaissance Macro (Neil Dutta)
- FOMC to stand pat in July, Sept.; 50% odds of Dec. move
- Fed might hike in Dec. if labor mkt recovers, estimates of GDP remain ~2%, financial conditions ease
- Story link
- Stifel (Lindsey Piegza)
- Fed “has no other option but to remain on sidelines”
- Uncertainty, volatility from Brexit takes any near-term hike “off the table”
- Story link
- Warburg (Carsten Klude)
- Fed may lower rates if Brexit-fueled volatility lasts
- Lowering of rates may occur before autumn if equity mkts experience sustained turbulence
- Story link
Source: BFW (Bloomberg First Word)
People
Rob Carnell (ING Groep NV)
Carsten Klude (Mm Warburg Investment Research)
Cliff Tan (Bank of Tokyo-Mitsubishi UFJ Ltd/The)
David Doyle (Macquarie Group Ltd)
Ethan Harris (Bank of America Corp)
To de-activate this alert, click here
UUID: 7947283