At next week’s policy meeting, the Fed is likely to reiterate its current mantra that it can be “patient” in waiting to hike interest rates. Admittedly, stock markets have recovered most of the losses from December and credit spreads have narrowed again, suggesting that fears of an imminent US recession have eased. But the ongoing government shutdown and the continuing weakness in the incoming global economic data are good reasons to stick with the more cautious stance.
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