El-Erian Says He Expects Fed to Hike in June

Mohamed El-Erian, the chief economic adviser at Allianz SE (ALVG.DE), said on Monday he expects this week’s Federal Reserve policy-setting meeting to set the stage for a June interest rate hike.

El-Erian told Reuters: “Fed officials may even be tempted to hike as early this week though this remains a lower probability event.” The Federal Open Market Committee is due to meet Tuesday and Wednesday and then next on June 14-15.

“Notwithstanding the headwinds from abroad, the Fed is likely to hike this year at least once, and possibly twice,” El-Erian said.

Earlier this month, Fed Chair Janet Yellen said the U.S. economy was on a solid course with some hints of inflation, so the Federal Reserve was on track for further interest rate hikes.

“The U.S. economy has continued to progress in a satisfactory way. We continue to see good job performance, some evidence of inflation moving up, so that was our expectation when we raised rates in December,” Yellen said.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza