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2 Jan 2015
Can US raise rates in 2015 amidst global concerns? – RBS
FXStreet (Barcelona) - The Research Team at RBS notes that today’s ISM release will help determine the answer to whether US will raise rates amidst global concerns.
Key Quotes
“For the US, the critical question of "can the US go it alone amidst these global concerns, and raise rates in 2015, even modestly?" remains. Today's ISM release will help determine if the base case answer in the markets continues to be "yes," and if the ongoing equity market rise continues to send the message that even if the Fed does so, riskier assets should be just fine.”
“Some of this I believe is the current impression that even as rates rise, it will happen in a "not too hot not too cold" fashion – rate rises won't be too hot or fast given the global outlook and local inflation backdrop, while the cold coming from overseas is to be met with asset boosting stimulus abroad, helping all global assets.”
“This may end up being the case, but I have doubts that even if it is, we will get there without any volatility, minor market "accidents," or periods of concern that one side of the other will indeed be "too hot" or "too cold.”
Key Quotes
“For the US, the critical question of "can the US go it alone amidst these global concerns, and raise rates in 2015, even modestly?" remains. Today's ISM release will help determine if the base case answer in the markets continues to be "yes," and if the ongoing equity market rise continues to send the message that even if the Fed does so, riskier assets should be just fine.”
“Some of this I believe is the current impression that even as rates rise, it will happen in a "not too hot not too cold" fashion – rate rises won't be too hot or fast given the global outlook and local inflation backdrop, while the cold coming from overseas is to be met with asset boosting stimulus abroad, helping all global assets.”
“This may end up being the case, but I have doubts that even if it is, we will get there without any volatility, minor market "accidents," or periods of concern that one side of the other will indeed be "too hot" or "too cold.”