A Sunday note from MS economists, a snippet or two
On markets:
- Volatility remains elevated
- concerns about the health of the global economy have re-emerged
- tightening financial conditions
On the Federal Reserve:
- This past week, we heard from both the Chair and Vice-Chair
- We think they've sent a consistent message: The Fed is data-dependent, but with the economy doing as well as it is today, it still anticipates a gradual hiking path. While the bar for changing course remains high, we sense a subtle shift in tone relative to a few weeks ago, putting more emphasis on data dependence and signaling some flexibility on policy management after reaching neutral.
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OK, so read that as the December rate hike is still on. As are those though to mid-2019, in March and June.
