Citi maintains expectations of Sept rate hike by US Fed

SINGAPORE (June 22): Citi Research is maintaining its expectations of an interest rate hike by the US Federal Reserve in September, with December as a close alternative if the Fed does not move in September, according to a Tuesday report. The research house also expects low rates to persist.

This follows Fed Chairman Janet Yellen’s testimony to the US Senate in which she provided her assessment of economic conditions that may imply a slower pace of interest rate normalisation.

“Proceeding cautiously in raising the federal funds rate will allow us to keep the monetary support to economic growth in place while we assess whether growth is returning to a moderate pace, whether the labor market will strengthen further, and whether inflation will continue to make progress toward our 2% objective,” says Yellen.

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