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Van-Petersen: What IF the US Fed doesn’t hike rates?

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The US Federal Reserve is widely expected to hike rates for the first time in almost a decade, when the Federal Open Market Committee meets on Wednesday December 16. Saxo Bank’s Kay Van-Petersen looks at how markets would react in the unlikely scenario that the Fed fails to deliver on expectations.

Van-Petersen explains what the likely reaction would in major currency pairs as well as in commodity-linked currencies. He also looks at how US bond yields would be impacted and what would happen to commodities like gold.

While it is trickier to predict how equity markets would behave if the Fed doesn’t hike rates, Van-Petersen strongly believes that the US central bank would lose all credibility in the financial market if it doesn’t deliver on December 16.