FOMC: No rate hike in Sept, Wait till December for lift-off – Nomura

By FXStreet FXStreet (Delhi) – Research team at Nomura, suggest that everyone will be keeping a close eye on this week’s FOMC meeting for any hint on rate hike but analysts at Nomura are maintaining their call that the Committee is likely to raise rates for the first time in December.

Key Quotes

“At the conclusion of the 16-17 September FOMC meeting, we expect the FOMC to keep the target range of the federal funds rate at current levels. We think the uncertainty about the outlook for inflation remains material and the selloff in global financial markets over the last six weeks has raised new downside risks.”

“The key issue will be whether or not the decline in sentiment impacts consumer spending. But the upturn in consumer sentiment in 2014 and earlier this year did not lead to stronger consumption so a modest downturn may not affect consumer behavior in the near term. But it’s possible that consumer behavior is more sensitive to the downside than to the upside.”

“Against this backdrop, we would argue that the probability for a September liftoff has not materially increased and reinforces our view that the Committee will want more evidence that the impact from recent financial and economic developments …read more

Source:: FX Street