Market news
08.02.2022, 13:55

Hawkish Fed to keep USD elevated in the medium-term – Citibank

The Federal Reserve (Fed) is hawkish and preparing to deploy monetary tightening tools through higher rates and balance sheet roll-off. This leaves scope for further gains in USD, economists at Citibank report.

More room for USD to gain

“We expect at least 4 Fed hikes in 2022 and 3 in 2023 with QT likely to begin in July 2022.” 

“The bottom line is that a Fed which is removing liquidity versus an ECB/BoJ which are still adding liquidity is likely to keep USD elevated medium-term.”    

 

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