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Fed Hikes Rates as it Prepares to Shrink Balance Sheet

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We reaffirm our call for a September rate hike. The Fed will begin shrinking its balance sheet in Q4. The balance sheet won't normalize before 2021. Without fiscal stimulus, the Fed may be too optimistic on achieving its inflation objectives. The yield curve should continue to flatten.

Ned Davis Research | Fixed Income | U.S. Comment | Daily

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