Wall Street almost unanimous on US rate increase next week: survey

[NEW YORK] Wall Street’s top banks were almost unanimous on the perspective the Federal Reserve increases interest rates at its policy meeting following a more powerful-than-prediction February US payrolls report, a Reuters survey showed on Friday.
235,000 workers last month was hired by companies the 190,000 prognosis among economists polled by Reuters .
A fall in unemployment, more individuals seeking jobs as well as a rebound in wage increase were other positive details of the report which economists at these top banks reckoned give the Fed a green light to increase rates by a quarter point to 0.75-1.00 per cent.
“It ticks all the boxes for the Fed to move next week,” said Michael Hanson, chief US macro strategist at TD Securities in New York.

The Fed formerly increased rates by a quarter point to 0.50-0.75 per cent in December.

TD is among the 23 primary dealers or banks that do business directly with the Fed.
The path of rate increases in 2017 could shift, based on primary dealers to be sure.
It might speed up in the event the market accelerates due to potential tax cuts, freer regulations and infrastructure spending from U.S. President Donald Trump and a Republican-controlled Congress. On the flip side, international developments including surprise election results in Europe, which might roil financial markets may slow it, they said.
In 2017, the anticipated rate increase in under a week would be followed by two more increases after barring unforeseen results, in line with the survey.
A previous Reuters survey ran on Feb 3 revealed 14 primary dealers say they anticipated no rate increase in March of them expecting this kind of move by the ending of the next quarter with 12.
The remarkable shift in expectations for a March increase arrived before Friday’s powerful occupations amounts.
A group of Fed officials including Fed Chair Janet Yellen beaten at the point they were prepared to lift rates at its forthcoming meeting as the market is near full employment and inflation to closing in on their 2 percent goal.
Dealers’ perspective on a March increase, as measured by interest rate futures, soared to 80 per cent from 30 per cent in reaction to an onslaught of hawkish rhetoric from policymakers.
Their perspective on the chance of a rate increase reinforced after Friday’s jobs report to 93 per cent, based on the FedWatch tool of CME Group.
After March, nevertheless, primary dealers were split on the time for when the Fed would raise rates during the remainder of 2017.
Twelve of the 23 retailers found a rate increase to 1.00-1.25 per cent by the June 13-14 assembly, while nine anticipated such a move by the Fed’s September meeting, the latest Reuters survey revealed.
Six of them predict the Fed’s closing rate increase for 2017 at its September meeting, bringing its target range to 1.25-1.50 per cent.
Fourteen primary dealers said they saw the Fed raising rates to 1.25-1.50 per cent at its Dec 12-13 assembly.
REUTERS