Analyst: Fed Chairman Walsh is unlikely to challenge consensus

On 28 July, Mabrouk Chetouane, Director of Global Market Strategy for Investment Management in Natixis, stated in a report that it was unlikely that Federal Reserve Chairman Walsh would challenge the current consensus at his second meeting of the Monetary Policy Committee. Chetouane stated that Walsh would not yield to the temptation of a 25 basis point increase, although at this stage it is almost impossible to return inflation to the target level by the end of the year. Moreover, Walsh would not wish to risk undermining the slow but steady improvement in the labour market — a trend that has been going on for weeks — by tightening monetary conditions. Analysts generally expect the Fed to remain in place on Wednesday, but the currency market reflects a 38 per cent interest rate increase probability. Kim Xian