- It is too early to rule out a rate hike – OBI Online

As expected, there are no changes in monetary policy to the US Centres bank (Fed) yesterday, and the policy rate was kept unchanged at 0.5 percent.

“Description of activity growth and the outlook for growth and inflation were more cautious than before, which was also as expected. Growth in private consumption and investment were described as “moderate”, while the Fed in December said the growth had been “solid”. In addition, noted the Fed that stock investment has slowed, which has reinforced the downward trend in activity growth from the third to the fourth quarter, “writes DNB Markets in today’s morning report.

However regarded labor market that is still strong, and it is considered that there has been “no further decline in the utilization of labor resources.”

Looking ahead, Fed that the economy will continue to grow at a “moderate” pace, and that the labor market will continue to improve. This is according to DNB Markets unchanged from the description in December.

“But the Fed’s assessment of risk has changed . In December, the risks for growth and employment described as” balanced “. This passage is now removed and replaced with one that would “monitor closely” the global economic and financial developments and consider any implications for the labor market and inflation, and the risk for the general outlook. If anything indicates that the Fed has become more uncertain global growth, and the need to get more information about how this affects the US economy before eventually making something, “skirver brokerage.

Fed says, moreover, that the inflation outlook has eased in the short term.

“The question we must now ask ourselves is whether we will have sufficient information in February that the Fed will dare to raise its key rate in March, so we have to stop,” said the in the report.

It appears inter alia that China soon will “pause” in a few weeks time in conjunction with the Chinese New Year, which means we will get little information that can neither deny or confirm whether there fundamental picture is about to worsen or improve.

The price of oil is also difficult to say anything about the short term.

DNB Markets can not exclude that the Fed will raise rates March, although the likelihood of this has slowed in recent weeks.