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.
“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.”