Ulyukayev not expecting ‘major shocks’ from potential rate hike in U.S

SOCHI. Sept 16 (Interfax) – Because financial markets have largely priced in the effect of a potential rate hike by the U.S. Federal Reserve, Economic Development Minister Alexei Ulyukayev does not expect any major shocks if the U.S. Fed does approve a rate hike.

“It seems to me that for the most part the markets have included the rate hike decision in their expectations. If it is not accompanied by any strong statement, that this is the beginning of a series of hikes, then I think in this case there will not be any major shocks,” Ulyukayev told journalists in Sochi on Wednesday.

The minister said that expectations for a rate hike have notably fallen.

“I remember that the majority of analysts lowered their expectations on an increase this month. If already in the summer more than half thought that there will be [an increase], then now only 20% of analysts think so,” Ulyukayev said.

“But the matter doesn’t only concern this. The matter is that, if one understands the Fed, that this is part of the cycle of raising rates, or it will be simply limited by a one-off step, it isn’t important when it is done, in September or in December. So, how the announcement will be made at a Fed press conference, this is very important,” the minister said.