Talking Points:
• A zero-bound rate policy and QE from the Fed have contributed to economic and capital market growth
• The Fed has taken a concerted effort to acclimate the market to an inevitable normalization of policy
• With a consistent FOMC communication, trends in data and worries of QE risk; a hike likely comes sooner
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It is one of the most frequently posed questions amongst market participants nowadays: "when will the Fed trigger its first rate hike?" Opinions range from vehement denial of a move their year and possibly more stimulus to those that anticipate a launch time at the June meeting. There is strong evidence to support a first hike that is realized earlier - between June and September depending on the data heading into the June meeting. Growth, labor and inflation trends are solidifying a foundation for a first foray into normalizing. Perhaps more convincing is the central bank's own efforts to manage expectations heading into the mid-year speculation. We discuss the Fed's timing and the market impact it has in this weekend Strategy Video.
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