What To Expect From FOMC Minutes? Market predictions and reactions - page 10
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The official statement for this week : "We have no idea what are we doing"
And they keep on "not doing" it for ages
And they keep on "not doing" it for ages
But they are doing it : printing the money (creating more and more fiat money) and transferring it directly to the pockets of their bosses. We can just watch what are they doing
Fed's Beige Book Cites Dollar, China Among Chief Headwinds
The fortunes of the US economy remained broadly unchanged in the early autumn although a stronger dollar and China's slowdown are taking their toll on the expansion.
The dozen districts reported "continued modest expansion in economic activity," the summary of commentary on current economic conditions, better known as the Beige Book, showed on Wednesday.
The survey found that six regions characterized growth as "modest" while three said it was "moderate", compared to five six and five in the previous issue, respectively. Two areas simply noted that activity increased. Notably, the Kansas City district complained about "a slight decline in economic activity."
The fresh document tracked the period between mid-August and early October.
Last month, the Fe's policy committee refrained from raising the policy rate, despite having spent months for preperation, due to growing concerns about the economic outlook amid weaker global demand.
In their recent remarks, some policymakers wanted to keep the possibility of the lift-off before the year end alive but dependent on further improvement data whereas others suggested a delay until next year would be more appropriate given lackluster inflation pressures and an overall slowdown in momentum.
There are two meetings of rate-setters remaining this year: on October 27/28 and on December 15/16.
"A number of districts cite the strong dollar as restraining manufacturing activity as well as tourism spending," the Beige Book said.
Still, the business leaders surveyed by the regional Fed banks "were generally optimistic about the near-term outlook."
USD Into CPI: Does Inflation Really Matter? - Credit Agricole
The recent price action in the G10 FX markets seems to suggest that G10 inflation releases matter less these days. Case in point is the GBP that lost ground in the wake of the disappointing CPI print on Tuesday to only recoup most of the losses the next day on the back of a decent if not stellar labour market data release. EUR is another currency that seemingly defies the gravity pull of weaker inflation prints in recent months. On the other side of the fence are the two scandi currencies – NOK and SEK - that struggled to extend their recent gains despite better than expected core inflation data in recent days.
The common denominator that can explain the lack of sustained FX response seems to be the fact that inflation is not enough to change the relative policy outlook for the respective central banks. Indeed, most of the MPC members will still tell you that the inflation undershoot is only temporary while the Governing Council members will indicate they need more data to assess whether QE was successful or not. Both Riksbank and Norges Bank seem quite willing to accept higher inflation and remain committed to keep their currencies close to the lows.
So, where does this leave us ahead of the US inflation data later today? Does inflation really matter? Going into the US CPI print consensus is for a contraction in the annual headline inflation and stable core inflation print. If confirmed, the outcome may have less of an impact on market Fed rate hike expectations.
Indeed, market bets on Fed lift-off were pushed back as far as next April after the weak retail sales and PPI inflation released yesterday. The correction in both Fed rate hike expectations and USD is starting to look excessive and we believe that it would take a really weak CPI print today to see a continuation of the recent market moves. A stronger print may give the USD some breathing space. It may be too early for a rebound, however, with markets remaining cautious ahead of the IP tomorrow.
source
All the predictions are wrong - since all the predictions are manipulated
The big question is : how dovish will FED get after ultra dovish Draghi this week
Dollar Buying Risky After China, ECB Moves It's been a great week to be long U.S. dollars and the source of the greenback's strength is monetary-policy divergence -- one of the most meaningful drivers of currency flows. First, it was the ECB, which set expectations for December easing and Friday China slashed interest rates, lowered its reserve-requirement ratio and warned it could ease further. The latest moves by the ECB and China are a double-edged sword for the Fed. One of the Federal Reserve's greatest concerns last month was that the strong dollar and easier monetary policy abroad would drive the buck higher. This is a problem for Janet Yellen because a strong currency hampers inflation and trade activity. Also, China and the ECB are taking steps to stimulate their economy to counter slowdown and global uncertainty, which was also one of the Fed's main concerns. So while it can be argued that stimulus abroad is good for U.S. markets -- making it easier for the Fed to raise interest rates in December -- the reasons why these central banks are easing and the consequence it has for the dollar could also deter them from tightening.
We are long-term dollar bulls but the "trader in us" see the risk being long dollars ahead of next week's FOMC meeting. In other words, we'll either be looking to sell dollars into FOMC or buy them at lower levels post Fed meeting. Expectations for Fed tightening shifted significantly since September. Last month, Janet Yellen suggested that rates could be increased in October -- accompanied by an unscheduled press conference. These hawkish words drove the dollar higher but after weak nonfarm payrolls growth, stagnant wages and disappointing consumer spending numbers, there's zero chance of a move this month. In fact, they could even stand down in December. The Federal Reserve is in a very difficult to position as many policymakers are ready to raise interest rates but recent economic reports discourage a move. Don't expect the FOMC statement to provide much clarity on monetary policy. Many U.S. policymakers still believe that rates could rise this year but nearly all want to see back-to-back strength in U.S. data from here on forward before tightening.
FOMC to leave markets guessing again next week says BofA Merrill
The October FOMC meeting is unlikely to deliver any major changes in policy or language, despite several Fed officials' recent attempts to characterize this meeting as "live", says Bank of America Merrill Lynch.
A flat distribution for liftoff.
"Without a forecast update or press conference scheduled, the focus will be on interpreting any revisions to the statement language. We expect relatively minor edits, however, and the interesting discussion won't appear until the minutes are released later in November. At this stage, we continue to see a relatively flat distribution for the timing of liftoff. December is our modal forecast for the first rate hike, but there is a significant chance that it could be later - depending on the upcoming data flow,"
No clear signals... once again
"The FOMC has tried to dissuade markets from expecting any explicit signals about upcoming policy changes, emphasizing data dependence. As such, we anticipate no meaningful changes to the policy guidance language. That should not be read as a sign the Fed will not hike in December; rather that they are keeping all options open. We still see a significant chance that the FOMC will hike this year, but we likely will need to wait for subsequent speeches to get any clarity on the timing of liftoff,"
I too retain my long-held view that interest rate hikes here in the UK or across the pond aren't going to happen any time soon
The US Fed FOMC decision and statement comes on Wednesday at 18.00 GMT
read more
The Fed's Inconvenient Truth (In 1 Hope-Crushing Chart)
The question we are surprised everyone is not asking is, after 6 years of experimental extreme monetary policy that is utterly failing to create anything like escape velocity, isn't The Fed's inconvenient truth that they are impotent (as opposed to omnipotent) at anything other than financial asset inflation and the transitory mirage of wealth creation?