European markets head for a positive open as investors focus on the Fed’s next move
Investors may be getting a bit too excited about potential changes from the Fed eral Reserve, according to Lauren Goodwin , economist and portfolio strategist at New York Life Investments . Goodwin said in a note that she expected the Fed to hike by 0.75 of a percentage point on Wednesday and half a point in December, but that the slowdown should not be seen as the start of a big shift from the central bank.”A Fed pause is not the same as a pivot. Certainly, deteriorating economic and credit conditions could cause the Fed to pivot modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a note. Goodwin pointed out that the first rate hikes should now start to show their impact across the broad economy, instead of just housing. However, the Fed will need several months of data to go its way before changing course .”At this point, with inflation surprising as much as it has already, the Fed will want to see clear signs of reversal in wage growth before pivoting. Recession should be considered a base case rather than a risk,” Goodwin said.
Investors may be getting a bit too excited about potential changes from the Federal Reserve, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
Goodwin said in a note that she expected the Fed to hike by 0.75 of a percentage point on Wednesday and half a point in December, but that the slowdown should not be seen as the start of a big shift from the central bank.
“A Fed pause is not the same as a pivot. Certainly, deteriorating economic and credit conditions could cause the Fed to pivot modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a note.
“At this point, with inflation surprising as much as it has already, the Fed will want to see clear signs of reversal in wage growth before pivoting.
