Some representatives of the international expert community remind us that the Fed is going to go back to discussing the possibility of another interest rate hike in the near future. This discussion is going to take place during the forthcoming FOMC meeting in June. They say that the markets are wrong when expecting the same interest rate for the 4th month in a row.
Two representatives of the Federal Reserve – Dennis Lockhart, President and CEO of the Federal Reserve Bank of Atlanta, and John Williams, President and CEO of the Federal Reserve Bank of San Francisco – claim that the existing condition of the U.S. economy allows another interest rate hike during the forthcoming FOMC meeting scheduled from mid June 2016.
If to believe the results of the recent survey by Bloomberg, the respondents say that the likelihood of another interest rate hike in June is equal to 12%. Still, the central bankers say that the likelihood of such a step is much higher. Over the next couple of weeks until June 14th – 15th, the FOMC members will be making speeches, which is expected to make the markets ready for a more realistic range of opportunities awaiting them down the road.
It should also be noted that the previous FOMC meeting ended up with a decision to leave the key interest rate unchanged within the range between 0,25% and 0,5% per year. At the same time, the meeting minutes no longer contained the risk warning that used to be there in the previous minutes and usually concerned the risks crated by financial markets as well as the global economy.
As for Mr. Lockhart, he says that it would be nice to see the financial markets and the Fed looking in the same direction. Masterforex-V Academy experts say that for now, the central banker is not ready to clarify his stance when it comes to backing or rejecting another interest rate hike. As for his FOMC fellow member Mr. Williams, he still believes there is some space for 2 more interest rate hikes this year. At the same time, unlike Mr. Lockhart, he is ready to back another interest rate hike in June given the existing conditions. However, everything still may change over the next couple of weeks, he says. To his mind, international investors have been too busy focusing on negative scenarios while the forecasts indicate stable economic recovery.
