June Fed hike remains a possibility – ING

FXStreet (Barcelona) - According to the Research Team at ING, a data bounce in US along with signs of bottoming inflation might keep June Fed hike still on the cards.

Key Quotes

“The Federal Reserve meeting will be the main focus next week, coincidentally happening on the day that the US releases its preliminary estimate for GDP growth for 1Q15. This figure looks set to be poor given disruption from bad weather and the West Coast port strikes, which severely impacted trade. Retail sales have since posted a modest recovery and housing numbers are looking better.”

“As such we look for growth of around 0.8%. Nonetheless, the trade and inventory contribution is particularly uncertain and so we are surprised at the narrow range for the consensus number (+0.1% to +1.7%).”

“The soft growth figure means it will be difficult for the Fed to offer any clear guidance in the FOMC statement – they have already stated there will be no policy changes in April.”

“A hike in June remains a possibility, but we will need to see the data bounce imminently together with signs that inflation has clearly bottomed.”