05 Aug Fixed Income Perspectives – Unwind First, Hike Later
The Federal Reserve reaffirms its view that softer inflation data are temporary, and therefore the path of rate hikes remains unchanged for now.
Voya Investment Management – Fixed Income Perspectives – July 2017
The Federal Open Market Committee (FOMC) raised interest rates 0.25% at the June meeting and reaffirmed its commitment to gradually hiking rates as the labor market strengthens. While the Fed remains committed to its hiking schedule, reducing its balance sheet has emerged as a higher priority and we expect action this September.
In the July Humphrey Hawkins testimony, Federal Reserve (Fed) Chair Janet Yellen acknowledged the weaker link between a tightening labor market and inflation but reiterated the FOMC expects the federal funds rate to reach 3% in 2019.
Elsewhere, the global outlook is firm for Europe, Japan, as well as China and other emerging markets.