COMPASS GLOBAL MARKETS’ BLOG

Tuesday 23rd May 2017: The Fed is unlikely to raise rates in a slowing economy. We expect the USD to correct lower again this week awaiting Thursday’s FOMC May meeting minutes on thoughts on reducing the size of the Fed’s balance sheet. Nevertheless, a 14 June 0.25% US rate hike is almost fully priced in at 94%. As a result, we don’t expect any further USD upside momentum. The misalignment between US data & Fed speak continues after Fed’s Bullard suggested only 1 more rate hike in the US this year

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