The Fed followed through with raising rates and even sounded optimistic. The US dollar recovered also on Yellen’s dismissing of inflation. What’s next? Here is a hawkish reaction:
Here is their view, courtesy of eFXnews:
CIBC Research comments on today’s FOMC decision noticing that the Fed took what it was given, raising interest rates by 25bp as expected despite a soft run of economic data recently.
“And even though the Fed admitted that inflation had “declined recently†it doesn’t appear too concerned at this stage regarding that trend and still expects inflation to normalize near its 2% target in the medium term, although it is monitoring it “closelyâ€â€¦
…Overall, nothing here to change our forecasts for another hike in September and then the balance sheet unwind to start later in December, given little apparent concern regarding the recent weak data. As per last time, there was only one dissenter against the rate hike,†CIBC argues.
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