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US Fed likely to hike interest rate in June 2015: UBS

The Fed in no way indicated that international developments to date had changed its thinking: the policy outlook paragraph was otherwise unchanged, UBS said

The News International Team

Brokerage house UBS expects the US Federal Reserve to begin its interest rate hike cycle in June this year.

The Fed on Wednesday reiterated that it would remain patient in deciding when to raise interest rates.

“The FOMC did make one change to its policy outlook language, newly recognizing that “international developments” could affect the timing of the first rate hike. However, the Fed in no way indicated that international developments to date had changed its thinking: the policy outlook paragraph was otherwise unchanged,” said the UBS note to clients.

“On balance, the new language recognized that energy prices have dropped, and that foreign policy and growth outlooks may pose some risk to the US policy outlook. However the FOMC continued to signal its intention to move toward policy normalization patiently. We continue to expect the first Fed rate hike in June,” the UBS note said.

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