Standing pat has become the consensus.
In the early hours of Thursday, June 18 (Beijing time), the Federal Reserve will announce its decision from the June monetary policy meeting.
This meeting will mark Waller's debut as Federal Reserve Chair. Standing pat is widely expected, with market attention focused on statements regarding the interest rate outlook, balance sheet reduction, and Federal Reserve reforms.
Andrew Hollenhorst, Chief U.S. Economist at Citi: The Federal Reserve will cut rates by 25 basis points each in September, October, and December, totaling 75 basis points for the year. A strong jobs report will lead Fed officials to focus on upside inflation risks rather than employment concerns at this month’s policy meeting.
Tam Wai Man, Deputy Chief Investment Officer for Asia at BNP Paribas Asset Management: The likelihood of a Federal Reserve rate hike before the November midterm elections is low. The earliest expected hike would be in December, and the pace is likely to be more moderate than in 2022.
Wen Jiawei, Chief Economist and Strategist at Dah Sing Financial Group: The Federal Reserve will raise rates once between the third and fourth quarters of this year, depending on developments in the Middle East.
Cheng Jiawei, Senior Economist at ICBC International’s Financial Markets Department: The Federal Reserve could begin hiking rates as early as the fourth quarter, though the pace is expected to be gradual and the magnitude modest—likely below 5 basis points.
Head of Fixed Income Research and Strategy at Charles Schwab: The U.S. labor market remains robust amid persistent price pressures, giving the Federal Reserve grounds to argue for rate hikes—but likely only one or two moves.
Citadel Securities: The Federal Reserve’s next move is most likely a rate hike to curb intensifying inflationary pressures, and such a hike could come soon.
Ding Meng, Chief Economist at China CITIC Bank International: If the U.S.-Iran conflict is not fully and peacefully resolved by June, oil prices will remain elevated, fueling higher inflation. Under this scenario, we do not expect the Federal Reserve to adjust rates this year.
Fidelity International: The base case for the U.S. economy for the remainder of this year is a resurgence of inflation, with an estimated probability of 50%. We anticipate the Federal Reserve may stand pat for the year.
Invesco: The Federal Reserve is unlikely to raise interest rates this year, as such a move would not help alleviate supply-side issues and could instead exacerbate pressure on low-income households.
Goldman Sachs: The U.S. labor market has performed stronger than expected, leading the firm to no longer anticipate a rate cut by the Federal Reserve this year. Rate cuts, previously projected for December and March 2027, have now been pushed back to June and December next year, but with a probability of only 30%, down from the earlier estimate of 40%.
Editor/melody