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Outlook for US rates

Fed to raise interest rates 25bp in June and another 25bp in Q4-2015Reinvestment of maturing debt proceeds to end in early 2016, balance sheet reduction to startSociete Generale notes as follows .... Output gap closing, …

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Fed to raise interest rates 25bp in June and another 25bp in Q4-2015

Reinvestment of maturing debt proceeds to end in early 2016, balance sheet reduction to start

Societe Generale notes as follows ....

  • Output gap closing, CPI and wage inflation to accelerate

  • 3-month $ libor target lowered to 0.91% by end-2015

  • 10y UST forecast lowered to 2.55%, 10y swaps target reduced to 2.76% by end-2015

  • 10y UST/Bund spread to exceed 200bp by mid-2015

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