SEB: FOMC to stay patient at the rate announcement today – eFXnews
28 January 2015, 13:27
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The eFXnews Team shares SEB’s expectations on today’s FOMC statement, with SEB predicting that FOMC may retain its language that it can be ‘patient’, and that Fed might have a dovish tone in terms of short-term inflation forecasts.
Key Quotes
“Sluggish inflation is replacing unemployment as the main reason for later rate hikes. While liftoff can occur at a time when core inflation is close to its current levels, FOMC forecasts must point towards higher core inflation for liftoff to occur.”
“It is our understanding that the FOMC has its eye on the June 16-17th as most likely meeting for liftoff. Our forecast, however, is that liftoff will come at the September 16-17th FOMC meeting.”
“With respect to the statement, the FOMC will maintain its current language that it can be “patient” before normalizing monetary policy.”
“We see some scope for a slightly more dovish Fed as they will lower their short-term inflation forecasts. However, this should be weighted against a need for Yellen to build a slightly hawkish case ahead of the Fed testimony and deliverance of the semiannual MPR to the Congress in February– that is if there still is a concensus for raising rates this summer.”
Key Quotes
“Sluggish inflation is replacing unemployment as the main reason for later rate hikes. While liftoff can occur at a time when core inflation is close to its current levels, FOMC forecasts must point towards higher core inflation for liftoff to occur.”
“It is our understanding that the FOMC has its eye on the June 16-17th as most likely meeting for liftoff. Our forecast, however, is that liftoff will come at the September 16-17th FOMC meeting.”
“With respect to the statement, the FOMC will maintain its current language that it can be “patient” before normalizing monetary policy.”
“We see some scope for a slightly more dovish Fed as they will lower their short-term inflation forecasts. However, this should be weighted against a need for Yellen to build a slightly hawkish case ahead of the Fed testimony and deliverance of the semiannual MPR to the Congress in February– that is if there still is a concensus for raising rates this summer.”
