BTIM – More Fed hike pricing needs to come out of the US rate curve

When the latest Fed minutes were released, the probability of a Fed hike in September decreased from a half to about a third. More importantly though, more than a full 25bp rate hike was taken out of the curve from mid-2016 to mid-2017. We think a lot more needs to come out of the curve than this and our portfolios are positioned this way. It’s important to note that we don’t think rate hikes are necessarily a bad idea, but they definitely aren’t a good one. Why hike and go out on your own when inflation is benign at best? The risks are minimal. To read Vimal Gor’s full newsletter click the (VIEW LINK)