Online brokerage firm 2TradeAsia.com said the BSP should do a balancing act in the short term after August’s higher-than-expected inflation rate.
Philstocks Financial Inc. research head Japhet Tantiangco said the expected move by the Fed and BSP to keep their policy rates unchanged could boost market sentiments. Meanwhile, the Fed is widely expected to hold interest rates steady on Wednesday after a summer of mixed economic data, while leaving the door open to another hike if needed.
“We think the Fed is done with its tightening cycle,” EY Chief Economist Gregory Daco told AFP. “That view has not changed over the past couple of months.” Analysts at Goldman Sachs recently cut their forecast for a recession in the United States from 20 percent likelihood down to 15 percent, while other economists — including those in the Fed’s research team — say they no longer expect the US to enter a recession.
“If you look at expectations in the marketplace, there’s a growing confidence that we can pull it off,” he continued, adding that it hinged on the Fed “remaining attentive to the data.” “In our base case, the FOMC will ‘skip’ hiking at their meeting this month and then deliver one final 25bp hike in November,” Citigroup economists wrote in a recent note to clients.