NAB has pushed out its expectation for the next US Federal Reserve interest rate hike to the 2016 September quarter.
In its latest US economic update, NAB said it has changed its view about the likely path of the US Federal Reserve funds rate "in light of recent developments in financial and commodity markets".
"Our revised projection calls for a slower pace of increases earlier on and also lowers the expected peak rate [to 3 per cent]," said NAB.
NAB ruled out the possibility of the US Fed using negative interest rates as a policy tool as "chatter".
"Our view is that the most likely trajectory for the Fed funds rate is upwards," said NAB.
The US unemployment rate, at 4.9 per cent, is already at the long-term level expected by the Fed; there are signs that wage growth is strengthening and inflation is low, said NAB.
"Future tightening by the Fed will likely be quite cautious and sensitive to developments ... as a result, we have less than one rate hike a quarter up to mid-2017.
"However, if, as we expect, unemployment keeps falling and inflation moves back up around the two per cent mark then the Fed will want to accelerate the process, but even then still only slowly by historical standards," said NAB.
Read more:
Blue Sky posts $4.4m half-year profit
Global dividends fall by 2.2% in 2015
Fidelity joins ASX mFund service
Australian investors are increasingly moving away from traditional assets and looking abroad in their hunt for yield, according to J.P. Morg...
UBS’ full year net profit for 2019 came to $6.2 billion (US$4.3 billion), down by 5 per cent from the previous year, with the group fallin...
Maurice Blackburn Lawyers has filed a class action on behalf of more than 330,000 NAB super account holders, alleging breaches of super trus...
Get notifications in real-time for staying up to date with content that matters to you.
