Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers, said in a report that Federal Reserve Chair Warsh is unlikely to push back against the current consensus at his second monetary policy committee meeting. In Chetouane’s view, Warsh is not expected to opt for a 25-basis-point rate increase, even as returning inflation to target by year-end now looks nearly out of reach at this stage. He also said Warsh would be reluctant to tighten financial conditions in a way that could damage the labor market’s slow but steady improvement, a trend that has continued for weeks. For the upcoming meeting, analysts broadly expect the Fed to leave rates unchanged on Wednesday, while money markets are pricing in a 38% probability of a rate hike.
Odaily reported that Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers, said in a report that Federal Reserve Chair Warsh is unlikely to challenge the current consensus at his second monetary policy committee meeting.
Chetouane said Warsh is not expected to give in to the option of a 25-basis-point rate hike, even though, at this stage, getting inflation back to target by the end of the year is now seen as nearly impossible.
He added that Warsh would not want to risk undermining the labor market’s slow but continuing improvement by tightening monetary conditions. That improvement, he said, has already lasted for several weeks.
Analysts broadly expect the Federal Reserve to keep rates unchanged on Wednesday, while money markets are reflecting a 38% probability of a rate increase.
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