Tim Ghriskey, Chief Investment Officer, Solaris Asset Mgmt, believes it is 100 percent probable that the US Federal Reserve will raise rates in September but the hikes will be gradual that is around 25 basis points per quarter.The next hike could come during Christmas time or in January but they will keep raising time to time until they reach the one percent or one and a quarter percent on the Fed funds rate, post that they may take a breather.
Below is the transcript of Tim Ghriskey's interview with Nayantara Rai of CNBC-TV18.
Q: What is your money on? Is the Fed going to raise rates in September? What are the odds?
A: It is close to 100 percent probably. The Fed has been very vocal about it. I don't see any way that they do not raise in September. I was curious they didn't say anything about appending increase in September at the meeting or in the notes but the Fed does some strange things once in a while but we think they are going to definitely raise. They have been very clear about that and they really should raise. So, it is not going to be a surprise to anyone when it occurs.
Q: So, 100 percent chance of the Fed raising interest rate in September. What about another rate in 2015, what are the odds of that?
A: They are certainly a little bit lower but the Fed is going to start a series of rate hikes and what they have signalled is 25 bps increase per quarter for - actually for quite amount of time. What investors have to remember is that the Fed always couches that by saying they are going to be data dependent and indeed they will be and may be I shouldn't have said 100 percent in September because something really could happen economically or geopolitically that would delay the Fed raising rates but I really doubt it. But after certainly December would make sense, it would be after three months. Maybe they will do it around Christmas time, maybe they will rather wait till January but they are going to be on that schedule here and raising rates likely until we get to maybe one percent or one and a quarter percent in the Fed funds rate and then they might take a breather unless economic conditions have changed and of course they will have changed.
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