Excerpt from Nasdaq’s latest piece quoting DataTrek co-founder Nick Colas:
“As for Powell, Nick Colas, co-founder of DataTrek Research, contends that he will want to convince the market that the Fed will raise rates two more times this year, a one-hike-per-quarter pace. Right now, the market puts odds of two hikes at just over 50%, but Colas believes Powell would like to get that number over 70%. In order to make that happen, Colas writes that Powell will have to talk sound talk up the strength of the economy, sound convincing when he talks about accelerating inflation, and downplay tariffs. The first, Colas says is easy; the second “not so easy;” and the third “downright hard.” Trying to get the market to price in two hikes could be risky for the markets, Colas explains. “In short, getting markets to fully discount 2 more rate hikes in 2018 is a genuine high wire act, and there’s no net below,” he writes. “Equity markets are already twitchy about the trade issue ; downplaying its effects on the economy is risky.”
Read the whole article here on Nasdaq!