Saxo's Chief Economist, Steen Jakobsen says he's changed his mind on a US rate rise and does now believe we'll see the Fed move in June. He was commenting ahead of the nonfarm payroll figures that come out later on Friday. The FOMC's policies towards employment have been successful he says but their actions have been like a 'heat seeking missile' and a rise will be merely cosmetic as they want to be seen to be exiting the recent loose monetary policy they've been following.
More concerning to Steen is the Fed's second target, inflation which is way below the 2 percent target. The collapse in the oil price and the subsequent decline in capital expenditure will be a net drag on the US economy and the pent-up investments everyone's been expecting to be released is not going to happen, he says.