William Lee, head of North America economics at Citigroup, said in a research note: “Our outlook has little potential to be surprised on the upside, but the risks are very evident on the downside.”
Lee said the downgrade reflected “increased evidence of the dampening effects from looming uncertainty,” most notably the Federal Reserve’s decision to slow plans for interest rate normalization to two increases this year.
Similarly, Lee said in an interview with CNBC’s “Closing Bell” on Monday that the Fed’s monetary policy is unanchored.
“The current Fed is much more responsive to the markets,” he said. “The Fed is watching the market watching the Fed. The Fed monetary policy is no longer anchored by macro fundamentals; in fact, it reacts to not just data, but it reacts to global events and it reacts to market events.”
Full article: Citi slashes US outlook, risks ‘very evident’ (CNBC)