Organization: Fed Stands Pat This Week, Powell's Hawkish Tilt in Focus

BlockBeats News, June 16th, Capital Economics believes that the Fed will stay put this week almost for certain. The institution's Chief North American Economist, Stephen Brown, speculated that Powell will not offer his own rate forecasts but will still be asked about his views during the press conference. Brown stated: "The risk for the market is that Powell's remarks may be more hawkish than expected—either because of communication errors or simply because his current position is not as dovish as when he was vying for the Trump nomination."

However, Brown also warned that if Powell feels constrained by Trump, then an overly dovish tone could reignite concerns about the Fed's independence and potentially push up long-term bond yields. Brown suggested that there is a high likelihood of two "insurance rate hikes" in December and early next year.