The Fed certainly didn't rule out a March rate hike completely last week, but it was deliberately non-committal about the risks to the outlook. It's debatable whether the current uncertainty will clear up by the time of that March FOMC meeting. We anticipate an improvement in the US activity data, but it might be too soon to see clear signs of recovery in the Chinese data, which for the next couple of months will be disrupted by the New Year holiday. Given how risk averse the FOMC proved to be last year, it may not be willing to raise rates a second time if there are any lingering concerns about a more severe slowdown in China.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services