FOMC signals one rate hike in 2016

FOMC signals one rate hike in 2016. Since the last interest rate hike in December last year, the US economic outlook appears more and more gloomy as the global economy slows further, dragging down rate hike expectations. At the last FOMC meeting, the Fed maintained its dovish bias suggesting that the central bank will remain on hold at its June meeting. Across the Bering Strait, the Central Bank of Russia has kept its key rate unchanged at 11% despite declining inflation and a further rebound of oil price. It certainly missed an easy opportunity to spur growth. In Japan, the wait-and-see approach has also been favoured. While financial markets expected stimulus to be added, the BoJ has decided to first assess the effect of negative interest rates within the next few months before loosening – one more time – the monetary policy. In Australia, the local currency is subject to downside risk as inflation pressure remained subdued during the March quarter, fuelling speculation the RBA will step in and cut rates.
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This article is a guest blog written by Peter Rosenstreich from Swissquote