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Koefoed: 3 reasons why the Fed will delay a rate rise

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While a majority of analysts now believe the Federal Reserve will raise rates in June, Saxo's Mads Koefoed thinks it will wait until September. The bank's head of macro strategy says there are three reasons for a delay. 

The first is core inflation which Koefoed believes will go further south before it picks up at the end of the year. Secondly, Mads points to the labour market. Non farm payrolls may be up but unemployment is still at 5.5% and under-employment at 11%. He also points to low wage growth.

The third reason why Mads believes the FOMC will wait is down to an overall slowdown in the US economy. He says data has been mixed, partly due to poor weather. But with the housing stock for February 'crashing' 17% month-on-month he says residential investment will also be a drag on the first quarter. He says the tracking estimate for growth is only 1% quarter-on-quarter which is well below his full year target of around 3% growth.