Fed drops out of hyperdrive - Rabobank

Analysts at Rabobank are no longer expect any rate hike by Fed this year and expects its patience suggests that they are aiming for a summer hike.

Key Quotes

“Recent movements in the yield curve confirm our view that we are getting closer to a recession. Therefore, we doubt that the economic data will be strong enough to build a case for a restart of the hiking cycle.”

“We expect the Fed to put a halt to balance sheet normalization in the second half of the year, once the case for a summer hike has collapsed.”

“In 2020 we expect the Fed to start cutting rates, but probably too late to avert a recession during the course of the year.”