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According to the strategists of Societe Generale, one of the leading financial companies in Europe, the Fed could break interest rates in the second half of 2019.
In the client note of Societe Generale's strategists, including Subadra Rajappa, it was stated that the Fed could increase interest twice in the first half of 2019 after the rise in the rate "without certainty" that it could go into December, then give it away to the rest of the year.
The note pointed out that Fed officials had suspended rising interest rates and decreasing fiscal stimulus and modest growth / inflation in the United States.
The central bank, which would be forced to raise interest rates after the first half of 2019, said the end of 2019 would probably bring us closer to the end of the rate hike cycle and that the US economy would enter probably in recession in the first half of 2020.
SocGen strategists, who said that the rise in wages related to the resumption of employment in 2019 would reduce the company's profit margins and slow down its economy, expects that the "more cautious and more determined "relies on the data, after reaching a final funding rate of 3% in 2019.
According to SocGen, 10-year US Treasury bonds will reach 3.50% by mid-2019 because of the strong core indicators, the increased supply of bonds and the deficit.
The strategists who think that the yield curve can not be reversed in the years to come, however, think that between 2 and 10 years and between 5 and 30 years, the interest rate gap will approach 0 basis points.
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