The Federal Reserve is on track to hike short-term interest rates in December, despite the dollar’s strength and the likelihood of more stimulus in Europe. ‘This is a Fed that wants to hike interest rates,’ said David Lebovitz, global markets strategist at J.P. Morgan Asset Management, based in New York. ‘We are looking for more stimulus from the European Central Bank and I wouldn’t be surprised to see the dollar appreciate against the euro if the ECB expands its stimulus in December, but currency markets are very forward looking and a lot gets priced in. I almost wonder if some of the strength we’ve seen recently [in the dollar] is a little bit of buy the rumor and sell the news.’ Aside from a strengthening dollar, a weak November jobs report and falling oil prices (as terror threats stemming from Middle East turmoil grow across the globe) could derail a December rate hike. ‘That being said, we do think the Fed will hike rates before the end of the year and if they are given the opportunity, they’ll go ahead and do so.’ TheStreet’s Scott Gamm speaks with Lebovitz from New York.
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