BNP Paribas: Fed Won't Hike in 2016, 2017

The video discusses the interplay between the Federal Reserve's signals about potential interest rate hikes and the market's response, characterized by volatility and stress. It highlights the economists' concerns about the Fed's credibility and the challenges in making rate decisions. The discussion also covers the importance of financial conditions and data dependency for the Fed, with a focus on the future economic outlook, including slowing growth and inflation trends.

What is the main challenge the Federal Reserve faces when trying to prepare the market for potential tightening?

• Insufficient data

• Market's volatility and stress

• Political pressure

• Lack of communication

What does the feedback loop between the Fed and the market involve?

• Global economic trends

• Market's reaction to Fed's signals

• Fed's response to political changes

• Continuous communication

According to Dudley, what is crucial for the Federal Reserve when considering interest rate hikes?

• Political stability

• Financial conditions and data dependency

• Public opinion

• Global economic trends

What is BNP Paribas's house view regarding the Fed's interest rate hikes?

• The Fed will hike rates immediately

• The Fed will not hike rates until 2018

• The Fed will hike rates every quarter

• The Fed will decrease rates

Why does BNP Paribas believe the Fed will hold off on rate hikes later in the year?

• Slowing data and below-trend growth

• Economic growth above trend

• Political changes

• Increased inflation