Outlook for US rates

Fed to raise interest rates 25bp in June and another 25bp in Q4-2015

Reinvestment of maturing debt proceeds to end in early 2016, balance sheet reduction to start

Societe Generale notes as follows ....

• Output gap closing, CPI and wage inflation to accelerate
  
  
• 3-month $ libor target lowered to 0.91% by end-2015
  
  
• 10y UST forecast lowered to 2.55%, 10y swaps target reduced to 2.76% by end-2015
  
  
• 10y UST/Bund spread to exceed 200bp by mid-2015