18 Dec 2014
FOMC plays a neat hand – SG
FXStreet (Barcelona) - Kit Juckes, Global Head of Currency Research at Societe Generale notes that the FOMC played a neat hand by calming the markets by removing the “considerable time” phrase and introducing ‘patience’ while lowering the inflation forecasts.
Key Quotes
“On the surface of it, the FOMC played a very neat hand. Removal of the ‘considerable time' wording from the statement was achieved and yet by introducing ‘patience' and lowering both inflation forecasts and the path of the dots showing members' rate projections, enough was done to calm market concerns and trigger a global equity market rebound.”
“The biggest winner from the announcement was arguably the Russian Ruble! The plan was clearly to avoid being the Grinch who steals Christmas.”
“The key takeaway is that the Fed remains on track to hike rates in 2015. The cut in the median ‘dot' to 1.125% at the end of next year consistent with the SG forecast of 3 quarter-point moves, starting in June. As long as they move once, we will see a stronger dollar.”
“The contrast with further easing from the BOJ and ECB and the contrast between solid US growth and slowdown elsewhere will continue to support the dollar.”
“EUR/USD is on its way towards and then through 1.20, while the USD/JPY rally is up and running again, as long as the equity market bounce can continue.”
Key Quotes
“On the surface of it, the FOMC played a very neat hand. Removal of the ‘considerable time' wording from the statement was achieved and yet by introducing ‘patience' and lowering both inflation forecasts and the path of the dots showing members' rate projections, enough was done to calm market concerns and trigger a global equity market rebound.”
“The biggest winner from the announcement was arguably the Russian Ruble! The plan was clearly to avoid being the Grinch who steals Christmas.”
“The key takeaway is that the Fed remains on track to hike rates in 2015. The cut in the median ‘dot' to 1.125% at the end of next year consistent with the SG forecast of 3 quarter-point moves, starting in June. As long as they move once, we will see a stronger dollar.”
“The contrast with further easing from the BOJ and ECB and the contrast between solid US growth and slowdown elsewhere will continue to support the dollar.”
“EUR/USD is on its way towards and then through 1.20, while the USD/JPY rally is up and running again, as long as the equity market bounce can continue.”