The Fed is more confident on the recovery and brings forward to 2023 the first hike

In breve

The Fed has grown more confident in the positive signals the economy is providing and in a surprising move, brough forward to 2023 the date of the lift-off and foreseeing two rate hikes in that year. This increased confidence was visible in the tone of the press release.

Highlights:

  • The Fed is projecting a faster return to normality, and therefore monetary normalisation could be speeded up; two hikes in 2023, bringing the Fed funds rate to 0.625%, are now deem appropriate.
  • Growth projections for 2021 were marked up, and expected inflation was raised. However, the medium-term forecasts remain broadly unchanged with respect to March. The spike in inflation is considered transitory.
  • The FOMC started talking about talking about tapering. No timeframe was hinted at but we expect an announcement by the September meeting.
  • The surprise move lifted bond yields, especially at the short end of the curve and caused the S&P500 to lose 0.6% on the announcement.

Download the full publication below

The Fed is more confident on the recovery and brings forward to 2023 the first hike
PDF

Also interesting

Picture

© Generali Investments, tutti i diritti riservati. Questo sito web è fornito da Generali Investments ed è considerato come una comunicazione di marketing e una promozione finanziaria riferita ai prodotti e servizi delle società elencate di seguito, appartenenti al Gruppo Generali: Generali Investments Partners S.p.A. Società di gestione del risparmio, Generali Insurance Asset Management S.p.A. Società di gestione del risparmio, Generali Investments Luxembourg S.A. e Generali Investments Holding S.p.A. (nel prosieguo, congiuntamente indicate come Generali Investments). Inoltre, il sito può contenere comunicazioni di marketing e promozioni finanziarie di prodotti e servizi di società appartenenti alla piattaforma multi-boutique coordinata da Generali Investments Partners S.p.A. Società di gestione del risparmio, nello specifico di Generali Global Infrastructure, Sycomore Asset Management, Aperture Investors LLC., Plenisfer Investments SGR, Lumyna Investments e Generali Real Estate S.p.A. Società di Gestione del Risparmio