Fed on pace to raise rates mid year

Fed on pace to raise rates mid year. The evolving reaction in European government bond markets looks likely to drive U.S. interest rates for the time being. Long-term yields across developed- and some emerging-market economies have moved tightly together over the last 12 months. This is a strong hint that any meaningful move higher in long-term U.S. Treasury yields is likely to occur only in a broader global sell-off... We expect that Fed officials will be encouraged by the ECB's announcement. The action reduces downside risks to global growth, and thus the risks of spillovers to the domestic economy. We therefore expect very few changes in this week's statement from the FOMC. The committee can again state that it will be patient in deciding when to start normalizing policy. This would rule out rate hikes before June... Unless the global economy deteriorates meaningfully, the Fed looks on pace to begin raising rates around the middle of this year. (VIEW LINK) @certitude

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