At its event next week, the Federal Reserve is forecast to raise the FFTR by 50 bps, comments Economist at UOB Group Lee Sue Ann.

Key Quotes

“Given the clear indications for ongoing hikes to combat inflation spelt out in the May FOMC minutes but no intentions of cranking up the size of the hikes, we are comfortable to maintain our FFTR forecast for another 50bps each in the Jun and July FOMC.”

“We continue to expect 25bps in every remaining meeting of this year. This will bring the FFTR higher to the range of 2.50- 2.75% by end of 2022, a range largely viewed as the range for neutral stance.”