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28 Jan 2015
Can Yellen afford a change? – MP
FXStreet (Barcelona) - Dean Popplewell, Director of Currency Analysis at MarketPulse, comments that there is some confusion in the markets regarding the anticipated rate hike from the Fed, with expectations standing strong for a summer rate hike while few analysts & investors raising doubts for the same due to soft US data.
Key Quotes
“Investors seem to be happy to wade to the sidelines ahead of today Fed policy announcement (no post-press conference). Currently, it seems that consensus are expecting modest changes to the statement, including a possible removal of the “considerable time” chant. The market will be looking for clues on whether the Fed will loose its nerve to hike mid-2015?”
“The Fed had been expected to begin raising rates this summer, obviously backed by the U.S’s underlying strength. But it’s not as clear-cut as before – analysts and investors are raising doubts, supported by some softer domestic data (yesterday’s horrid consumer durable headline -3.4%) and a deflationary global backdrop.”
“The next two-months of U.S data are important as a signal for a June hike. All the markets want is a heads up that the FOMC is about to deviate from its path of hiking overnight interest rates. Any clues, hints or innuendos that a rate hike is being pushed further down the curve will halt the “big” dollars advance in a hurry.”
“Yellen and company needs to continue to support their transparent monetary approach. The market should be expecting policy makers to continue to take baby steps in achieving their objective of policy normalization.”
Key Quotes
“Investors seem to be happy to wade to the sidelines ahead of today Fed policy announcement (no post-press conference). Currently, it seems that consensus are expecting modest changes to the statement, including a possible removal of the “considerable time” chant. The market will be looking for clues on whether the Fed will loose its nerve to hike mid-2015?”
“The Fed had been expected to begin raising rates this summer, obviously backed by the U.S’s underlying strength. But it’s not as clear-cut as before – analysts and investors are raising doubts, supported by some softer domestic data (yesterday’s horrid consumer durable headline -3.4%) and a deflationary global backdrop.”
“The next two-months of U.S data are important as a signal for a June hike. All the markets want is a heads up that the FOMC is about to deviate from its path of hiking overnight interest rates. Any clues, hints or innuendos that a rate hike is being pushed further down the curve will halt the “big” dollars advance in a hurry.”
“Yellen and company needs to continue to support their transparent monetary approach. The market should be expecting policy makers to continue to take baby steps in achieving their objective of policy normalization.”