Senior Economist, Barron, FED discussed on

Automatic TRANSCRIPT

Anisimov on one hundred twenty countries i'm sandra kilhof this is bloomberg marcus much sandra let's get back to our guest this hour callum pickering senior economist at barron bogus still with us in our london studio so callum we're going to get to the bank of england and brexit in just a moment but first the fed because a rate hike is seen as all but a given essentially all on wednesday shifting the focus onto the dot plot goldman sachs expects that it will point towards four rate hikes this year soft jen among those who sees that as a little premature where do you stand in that debate whether or not we might see the dot plot heater essentially i think we'll probably see the dot plots heat up we'll probably see four hikes this year up from three in the last meeting now the critical point is whether or not this will be enough to any as it were dumping us economic growth i don't think that's the case us monetary policy is still very easy fed has a little real funds rate the ball and she is large what we see with that extra hike is just the fed responding to the economic data coming in a little stronger than they had expected before so they'll upgrade the economic forecasts the rising interest rates in the us announce were simply reflects the stronger investment demand and the higher interest rate environment that should go with it as the global cycle picks up so instead of putting the brakes on growth what the fed is doing is simply keeping the us economy on an even kilter fennell is interesting that you say the economy can withstand full rate hikes because the atlanta fed's gdp tracker has actually suggested some fourth quarter softness unexpectedly weak february retail sales data for example and also all that scare about inflation picking up that caused the equity market selloff seems to have kind of come down a little bit also goldman jp morgan cutting the quarter gdp forecast to two percent or less so i've obviously building at one side of the argument here callum but you also wrote a note recently saying that we actually need higher bond yields so do you think this why you think we're going to get full rate hikes because those bond yields need to move higher to sort of protect policy in future i'm just wondering what your reasoning is given.

Coming up next