Fed Yellen Strikingly Dovish Stance Supports Our Call For No Hikes This Year - BNPP

Fed Yellen Strikingly Dovish Stance Supports Our Call For No Hikes This Year - BNPP

30 March 2016, 13:20
Vasilii Apostolidi
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Yellen’s speech today was consistent with the FOMC’s communication two weeks ago – dovish, if not a bit more so. It supported our more dovish stance than the consensus on rates.

She sees the bond market’s reaction to negative shocks in January and early February as stabilizing: it helped limit the fallout from the shocks to the real economy.

In Yellen’s view, the FOMC’s reaction function didn’t shift in March; the facts about the global economy did.

Apparently there are few domestic risks on the Fed’s horizon, aside from credit markets – mostly the risks are foreign ones.

Easing options were mentioned, but not negative rates.

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BNPP's FOMC call is for no Fed hikes for the rest of the year.

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