Deutsche Bank: Fed Taking Eye of Politics, Watch For Keynesian Accelerator

The winds are changing at the US Federal Reserve ahead of a potential Fed rate hike, a Deutsche Bank report observes, as central bankers take their eyes off politics as a precursor to future economic growth and focus on data with a Keynesian style.

Deutsche Bank on Fed rate hike – Trump to create a Keynesian accelerator, but ..

Higher interest rates and a steepening of the US yield curve have been a Pavlovian response to the potential for tax reform and fiscal stimulus to come to market.

Forget the fact that the Trump administration’s recent push for a healthcare plan didn’t materialize. What is happening is a swirl of spending will create economic activity, a March 24 report from Deutsche Bank Investment Analyst Dominic Konstam, US Chief Equity Strategist Joseph LaVorgna and their North American research team theorize.