Fed Offered No Fireworks - Rabobank
Michael Every, Head of Financial Markets Research at Rabobank, notes
that the Fed left rates unchanged yesterday with one dissenter again
voting for a rate hike.
Key Quotes
“Perhaps
the key takeaway, as Philip ‘Caprica’ Marey covers in his detailed
post-FOMC note here, is that the phrase “However, global economic and
financial developments continue to pose risks” was removed from the
accompanying statement, while ”global economic and financial
developments” were downgraded as immediate factors to be closely
monitored.
That’s clear recognition that markets appear have a
far firmer footing today than a few months ago, even if that is more
down to the choice of footwear they have been provided with by central
banks than the actual level of the ground we are all standing on. Even
so, provided the US data hold up well in Q2, a June hike is still on the
table.
Ironically, of course, it’s that very prospect that is
still most likely to produce more than a few earth tremors as we draw
closer to June, with the Fed playing a ‘Keyzer Söze’ role: at the centre
of everything that’s going on while always pointing the fingers at the
other usual suspects. Markets were not immediately fed up again
yesterday, but as the Fed gets closer to ‘up’ again, they might be.”
