31 Oct 2013
Flash: FOMC does enough to keep 'taper dream' alive - RBS
FXstreet.com (Barcelona) - In view of Greg Gibbs, FX Strategist at RBS, The FOMC delivered the bare minimum to keep the taper dream beginning sooner rather than later alive, suggesting just a bit of improvement in the labour market.
Key Quotes
"The FOMC statement avoided any down-grade in its overall economic assessment, even though recent data indicate that this was a risk ahead of the statement. It continued to describe the recovery as “moderate”.
"It also removed the sentence that highlights its concern over tightening financial conditions; implying therefore that they had eased (perhaps a reflection of the further strong stock market gains and lower mortgage yields since the 18 September statement)."
"It also continued say that “improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”
"However, the reality is that it remains very unclear how much improvement in the labour market is required and whether the Fed may opt to wait out the fiscal uncertainty in Q1 next year before beginning to taper in any case."
Key Quotes
"The FOMC statement avoided any down-grade in its overall economic assessment, even though recent data indicate that this was a risk ahead of the statement. It continued to describe the recovery as “moderate”.
"It also removed the sentence that highlights its concern over tightening financial conditions; implying therefore that they had eased (perhaps a reflection of the further strong stock market gains and lower mortgage yields since the 18 September statement)."
"It also continued say that “improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.”
"However, the reality is that it remains very unclear how much improvement in the labour market is required and whether the Fed may opt to wait out the fiscal uncertainty in Q1 next year before beginning to taper in any case."