18 Jul 2013
Flash: Tapering to come later than sooner- BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at BBH argued that it seemed more likely that if the consensus is wrong about the tapering, it is that it takes place later rather than earlier.
Key Quotes:
“Some Fed officials seem to want to begin tapering as early as the FOMC meeting later this month, for example. Our view is based on our sense that the antecedent conditions will not be in place”.
“Unemployment is likely to be closer to 7.5% when the Fed meets in September than 7.0%, which Bernanke seemed to have suggested in the past as a sign of significant improvement in the labor market”.
“Looking at the base effect for the PCE deflator, core inflation is likely to still be nearer 1.0% than the 2.0% target”.
“In addition, we suggested that the Fed's anti-inflation credentials, which may be more important in the coming years, will be more enhanced by allowing the next chair person to implement the exit strategy, which would be in some sense wasted on Bernanke, who has a different historical legacy”.
Key Quotes:
“Some Fed officials seem to want to begin tapering as early as the FOMC meeting later this month, for example. Our view is based on our sense that the antecedent conditions will not be in place”.
“Unemployment is likely to be closer to 7.5% when the Fed meets in September than 7.0%, which Bernanke seemed to have suggested in the past as a sign of significant improvement in the labor market”.
“Looking at the base effect for the PCE deflator, core inflation is likely to still be nearer 1.0% than the 2.0% target”.
“In addition, we suggested that the Fed's anti-inflation credentials, which may be more important in the coming years, will be more enhanced by allowing the next chair person to implement the exit strategy, which would be in some sense wasted on Bernanke, who has a different historical legacy”.