Goldman Sachs on FOMC: Watch the long-run target rate for USD direction

15 June 2016, 08:10
Sherif Hasan
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Via Bloomberg comes this on the Federal Reserve from Goldman Sachs

GS expect the Fed to downgrade long-run target rate of its hiking cycle by 25 bps to 3%
  • This would lead to a weaker USD
  • It would be 3rd time since September of 2015 the Fed has cut its long-run target rate

GS add that if, however the is left unchanged, it could signal Fed isn't re-evaluating policy normalization & could lead to a USD rally in coming weeks,
  • Another positive for the USD would be if the Brexit vote was 'remain'
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