FOMC Preview: Still waiting for Tumponomics- Danske Bank

According to analysts from Danske Bank, the Federal Reserve will keep rates unchanged next week. They expect two rate hikes during 2017 (June and December).

Key Quotes: 

“We expect the Fed to maintain the fed funds target range at 0.50%-0.75% in line with market pricing and consensus.”

“As it is one of the lesser meetings without updated projections or a press conference, we will read the statement carefully for any signals of when to expect the next hike. Unfortunately the FOMC statements are very static and usually do not change significantly from meeting to meeting so we do not expect much news. The Fed is still waiting for information on ‘Trumponomics’.”

“We expect the Fed to hike twice this year (in June and December) with risk skewed towards a third hike. Due to the strong US economic data recently (not least the strong jobs report for December) we will look for signs of whether the next hike could come as soon as March or May.”