Expect Rate Rise Earlier Than Expected
As most are aware QE3 has officially ended last month. And in a surprising more hawkish tone in its statement following US Fed latest meeting last month, it highlighted “substantial improvement” in the jobs outlook and underlying strength in the broader economy with inflation being held down by lower energy prices.
Most analysts still expect rate rise to begin sometime in the middle of 2015 with Fed keeping to its language that it will keep rates low for a considerable time.
Here at MortgageWise.sg, we think that a lot depends on the labour market statistics over the next few months which we will be watching closely for you. With stock market surviving the mini scare in jittery October month and with most Wall Street (76%) reporting profits for 3rd quarter that has shot pass expectations, it does seem that labour market will tighten further leading to likely earlier rate revision than expected.
Japan’s surprised stimulus along with more aggressive measures from ECB will likely also bolster global market sentiments as we near the traditional feel-good end of the year period.