Simon Harvey (Monex Europe) | While every sell-side analyst didn’t expect the FOMC dot plot to signal a rate hike in 2022, markets had other thoughts. While two members shifted their expectations to move the median dot plot to signal rates at 0.3% in 2022, this under-delivered in the eyes of rates markets. The price of eurodollar 2022 futures rose, in turn lowering the expected interest rate, while risk was…
Fed’s monetary policy
J.P. Marín Arrese | Jay Powell was crystal clear in Jackson Hole about his willingness to scale down QE starting by the year close. As the US economy is recovering at full steam and prices skyrocket to a 13-year record, the idea that monetary policy will soon switch from the current over-loose stance to a more neutral one is hardly surprising. His message even sounded dovish as he cautioned against rushing into fighting inflation. He considered its current upsurge temporary, however, dismissing this upsurge might poise an…
The outstanding labour market performance in the US has triggered widespread speculation of a Fed rate hike as early as September. Nonetheless, most new jobs are part-time, while the hourly wage increase lags well behind its pre-crisis pace.
LONDON | BNP Paribas | Even after a very dovish FOMC meeting…the USD reaction has been muted. BUT the USD has strengthened against the EM currencies…
CANCUN (MEXICO) | A long time ago, in a galaxy far, far away…” the Federal Reserve did not even announce its interest rate movements. Fed watchers had to infer the lending policy of the world’s most powerful central bank just by painstakingly perusing the documents–release, obviously, in paper–of the Fed’s open market operations.
SAO PAULO | June 20, 2015 | By Marcus Nunes via Historinhas | US 2016 Republican Presidential Candidate Jeb Bush has set his presidential goal at 4 percent growth and 19 million new jobs. To do that, he would first have to “recruit” the Fed. Unfortunately, if the Fed acquiesced bad things would happen.
The Corner | June 17, 2015 | The Federal Open Market Committee’s policy statement, due to be released today at 1800 GMT, is widely expected to signal a first rates’ hike in September. For the first time in eight years the outcome of the meeting is not constrained by the “forward guidance” commitment. Is the US economy healthy enough?
CAMBRIDGE | June 15, 2015 | By Prof. Jagjit S. Chadha via Deutsche AWS | Could rising rates choke off the recovery or have post-crisis wounds healed sufficiently for the global system to take tightening policy in its stride?
MADRID | May 12, 2015 | By Ana Fuentes | Easy money and negative yields are fueling an unprecedented, dangerous bubble: prices of assets, stocks, bonds and houses are more inflated than ever. Central bankers are noting (and warning against) it. Some market makers are following suit and recommend to reduce exposure to risk.
MADRID | April 9, 2015 | By JP Marín Arrese | As the recovery pace of the US economy softens, FED policy makers are growing increasingly reluctant to raise rates too early. The March FOMC minutes released yesterday reveal they could only agree on deleting “patience” when referring to the foreseen tightening of the monetary stance. Members seem split on the timing, with many openly advocating postponing the move until the end of this year or even into 2016.