US rates not going up until December 2017?

The interest rate market is now so sanguine on future rate hikes that we have to look out to December 2017 for the first rate to be fully priced into markets.

Federal Reserve
Source: Bloomberg

The Federal Reserve are clearly worried about the combination of falling inflation expectations, a more subdued labour market and, of course, a ‘leave’ vote in next week’s UK referendum. The fact is they still want to be in a position to hike rates, but it could be one bridge too far. Chris Weston take a look at what was said in the June FOMC meeting and where to now for US interest rates.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.