Thursday, February 19, 2015

Fed rate outlook update: plenty of patience and low rates ahead

The release of the Fed meeting minutes on Wednesday lead a lot of people to believe that the Fed really will be as patient as they were claiming, and that the June chatter is probably only more of a hedge rather than a likelihood. September remains the high-probability time frame for liftoff.

Fed funds futures are now indicating only an 18% chance of liftoff in June and only a 38% chance in July, but still a 55% chance of liftoff in September.

A second hike in October is now less likely, while a second hike in December is more likely. A third hike in January is now unlikely.

In short, interest rates will still be quite low through the rest of the year.

-- Jack Krupansky

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