Macquarie Strategist Flags Three Risks to a December Fed Rate Hike

Macquarie Group foreign-exchange and rates strategist Thierry Wizman said three developments could prompt the Federal Reserve to skip a rate increase at its December meeting or rule out a 50-basis-point hike.

Wizman’s current base case is a 25-basis-point increase. He said there is still time for developments to change the outlook before the meeting.

Wizman cited a possible U.S. government shutdown and further declines in oil prices if geopolitical tensions ease. He also pointed to a worsening outlook for artificial intelligence that triggers another selloff in U.S. stocks.

A separate strategist has identified softer labor data, slower consumer demand and tighter financial conditions as factors that could lower the odds of a December rate increase.