The downward revisions to the FOMC's interest rate projections last week suggest that Fed officials are caught in two minds between beginning to hike rates in June or September. We still think that a continued run of strong Employment Reports will tip the balance in favour of a June lift-off. Either way, the more the Fed delays the first rate hike, the more we are convinced that it will be forced to hike rates more aggressively next year than the markets currently expect.
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