Kaiyuan Macro: No surprise as the Federal Reserve stays put this week, but the “hawkish risk” in Wosch’s debut can’t be ignored

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Golden Finance reports, June 16th: Capital Economics believes that the Federal Reserve is almost certain to hold steady this week. The organization's North American Chief Economist Stephen Brown speculates that Waller will not present his own interest rate forecast, but he will still be asked for his opinion at the press conference. Brown said, "The market's risk is that Waller's comments could be more hawkish than expected—either due to communication missteps or simply because his current stance is no longer as dovish as it was when he was seeking President Trump's nomination." However, Brown also warned that if Waller feels constrained by Trump, a clearly dovish tone could reignite concerns about the Fed's independence and potentially push up long-term bond yields. Brown stated that there is a high likelihood of two "insurance" rate hikes in December and early next year.
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