11 Jul 2013
Flash: FOMC – what now? - BMO
FXstreet.com (London) - Greg Anderson in BMO's FX Strategy department explained Bernanke’s FOMC minutes.
He said, following Bernanke’s prepared remarks, which were largely about ancient history, Bernanke took Q&A and was immediately asked if the market has misinterpreted his remarks in the June 19 press conference. He explained that Bernanke seized this opening to say that with inflation so low and unemployment so high that “highly accommodative monetary policy is needed for the foreseeable future”. He noted that with thin liquidity and only about 10 minutes left to the fixed income close, bond yields and the USD tanked.
“So what, if anything, can we take out of this as we look ahead to the next couple of weeks and the rest of the summer? My response to that rhetorical question is not a whole lot—just yet” – he said. “We need to see if the Bernanke-inspired slide in yields (and the presently attached-at-the -hip to the USD) will stick”.
He said, following Bernanke’s prepared remarks, which were largely about ancient history, Bernanke took Q&A and was immediately asked if the market has misinterpreted his remarks in the June 19 press conference. He explained that Bernanke seized this opening to say that with inflation so low and unemployment so high that “highly accommodative monetary policy is needed for the foreseeable future”. He noted that with thin liquidity and only about 10 minutes left to the fixed income close, bond yields and the USD tanked.
“So what, if anything, can we take out of this as we look ahead to the next couple of weeks and the rest of the summer? My response to that rhetorical question is not a whole lot—just yet” – he said. “We need to see if the Bernanke-inspired slide in yields (and the presently attached-at-the -hip to the USD) will stick”.