Flash
September Fed Rate hike integrated into our outlook
With Gurminder Singh, Investment Strategist Forex BNP Paribas Wealth Management and Edmund Shing, PhD Global CIO, BNP Paribas Wealth Management
Key Messages
1.We project two Fed hikes this year, one at the September meeting and another in December, taking the terminal policy rate to 4.25 %.
2.We keep a Neutral stance on US govies (ca. 5 years) with a 12‑month target of 4.50 % for the 10‑year yield, assuming the risk of a temporary overshoot toward 5 % in the coming months.
3.Accordingly, we change our 3-month EUR/USD target to 1.14 and keep our 12-month target at 1.20 (value of one euro).