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Market anticipates even more dovish Fed: Moltke-Leth
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The Fed leaves rates unchanged and says stimulus wind down will begin relatively soon. And according to Saxo Bank's senior sales trader Christoffer Moltke-Leth, this is because the Fed is struggling with an inconsistent labour market and low inflation.
The Fed still foresees one more rate hike this year and three hikes next year, but the market does not agree, says Moltke-Leth. "The market expects the Fed to be even more dovish."
Moltke-Leth also does not think that the Fed's planned balance-sheet reduction will amount to much with regards to interest rates. "The market has a greater impact
on stocks and fixed income
than balance-sheet reduction," he says.