How US political chaos weigh on Fed rate hike path

How US political chaos weigh on Fed rate hike path

The latest political chaos in the United States have pushed investors’ odds for an interest rate hike in June down, while may weigh on the Fed’s interest rates path this year.

The current effective fed funds rate and the forward overnight index swap rate are meanwhile seeing a 60 percent chance of raising interest rates in June, down from 80 percent just a week ago. Expectations for another rate hike in September also dropped.

A rate hike in June would give more flexibility to policymakers to either raise the rate again in either September or December, but now the Fed rate hike plans may face a forced change.

President Trump fired FBI Director James Comey and reports showing Trump’s disclosed intelligence information to Russian officials.

“A memo written by Comey surfaced Tuesday alleging that the president asked him to drop an investigation of former National Security Adviser Michael Flynn,” according to Bloomberg.

The dollar index resumed its collapse for a fifth straight session to hit a bottom of 97.27, ahead of U.S. unemployment claims and manufacturing index data due later in the day.

Ahmed Mamdouh

Ahmed Mamdouh, Co-Founder and Head of English Fundamental Analysis at, with 7 years of experience in the financial markets. Mamdouh holds a Master’s Degree in Economics from The American University in Cairo and a Bachelor Degree in Economics from The Faculty of Economics and Political Science, Cairo University.

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