BMO's Gallo Sees Three 2017 Fed Moves in 'Hawkish Hike'

The transcript discusses the Federal Reserve's potential rate hike in March, driven by market pressures and inflation nearing target levels. It highlights the Fed's communication strategy and its impact on market expectations. The US economy is performing well, but GDP growth remains mediocre, prompting the Fed to act quickly. Inflation data is crucial for future decisions, and the dollar is expected to appreciate. Political risks in Europe may affect the dollar's strength.

What is the primary reason the Fed is considering a rate hike in March?

• Fiscal clarity from the Trump administration

• Normalization of the US economy

• Communication strategy

• Market pressures

Which economic indicator is getting close to the Fed's target, influencing their decision?

• Unemployment rate

• Trade balance

• GDP growth

• Core PCE deflator

What is the expected outcome if the Fed decides on a hawkish rate hike?

• A decrease in inflation

• A significant drop in the dollar's value

• At least three rate hikes this year

• No rate hikes this year

Why does the Fed feel the need to act quickly despite mediocre GDP growth?

• To boost consumer spending

• To align with European economic policies

• Due to structural changes in GDP growth potential

• To counteract high unemployment

What is the projected impact on the dollar by the end of the year?

• Stability with no change

• 5 to 7% appreciation

• Complete devaluation

• A decline in value