I've seen a few, quite a few, pieces saying its not the initial Federal Reserve 'lift off' that's the question, but what the Fed will do after with subsequent hikes.
I can't agree .... I think the timing of the initial hike is important and still in question .... but, there you go.
Anyway ... here is one bank (ABN Amro) tackling the question of what happens after the initial rate rise from the Fed.
They begin:
- FOMC members are divided on the exact timing of the rate hike, but most are in favour of an increase this year
Then (bolding is mine) ABN Amro go on with more from the Minutes:
- Some participants emphasized that the stance of policy would remain highly accommodative even after the first rate hike
- Several noted that a data dependent approach would not necessarily imply increases in the target rate at every meeting
And conclude with their view on timings:
We are of the view that the pace of rate hikes will be gradual in 2015 with a rate hike every other meeting starting in September.
