Fed rate hike could come as early as June: Apollo’s chief economist

 The Federal Reserve could start raising the cost to borrow money as early as June if historical averages are any guide, Torsten Slok, chief economist at investment firm Apollo Global Management, said in an email.

The somewhat contrarian view comes as traders don’t foresee any likelihood that the central bank would begin raising rates in June, according to the CME Fed Watch Tool. Futures markets also indicate a 92% chance that the Fed will keep its target range unchanged at 4.25% to 4.5%.

“The last Fed cut was in December, and the number of months from the final Fed cut to the first Fed hike has historically been as low as seven months, implying that the Fed could hike rates already in June,” Slok said in the email on Friday.

 

Apollo Global

 

He pointed to a chart that shows a historical range of periods between the final rate cut to the first rate rise.

The Fed last year cut interest rates three times amid signs that inflation was falling. However, slower progress on inflation and indications that the labor market was stabilizing led the Fed to keep rates unchanged at its meeting in January.

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