Lee Sue Ann, economist at the UOB Group, comments on the imminent FOMC decision on interest ratesscheduled for Wednesday.
Key points
“The evolution of the US banking sector has raised valid concerns about the outlook, complicating the Fed’s fight against inflation, as price concerns mix in a cauldron of uncertainty in financial markets. If our base case of no systemic impact on the US financial sector remains valid, it is reasonable to expect that the US Fed will continue to focus on fighting inflation and push through its rate hike cycle.”
“So that, we will continue to see the Fed raising rates by a final 25 basis points, up 5.00-5.25%, in the May FOMC. We hope that there will be no rate cuts this year and that this terminal rate of 5.25% will last throughout 2023.”
Source: Fx Street
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