27 Apr 2016
FOMC: Expected to stand pat at the April meeting - TDS
Research Team at TDS, expects the Fed to stand pat at the April FOMC meeting as they continue to assess the impact on the outlook for growth and inflation from global events earlier this year.
Key Quotes
“The language of the accompanying communiqué should remain broadly unchanged, reflecting a continuation of the “wait-and-see” policy stance.
On the dovish side, one key risk is the potential for the Fed to downgrade the economic growth assessment, reflecting the sustained weakening in domestic economic growth momentum. And while the inflation picture has also softened somewhat, on net, that assessment should remain intact.
Even though the Fed will continue to remain data-dependent and keep all options open, we see some risks of a hawkish surprise in which the Fed signals a June/July hike in rates is not out of the question. A reinsertion of a “balanced” or “nearly balanced” risk assessment in the statement will be a significant signal of a shift towards an imminent hike in rates.”
Key Quotes
“The language of the accompanying communiqué should remain broadly unchanged, reflecting a continuation of the “wait-and-see” policy stance.
On the dovish side, one key risk is the potential for the Fed to downgrade the economic growth assessment, reflecting the sustained weakening in domestic economic growth momentum. And while the inflation picture has also softened somewhat, on net, that assessment should remain intact.
Even though the Fed will continue to remain data-dependent and keep all options open, we see some risks of a hawkish surprise in which the Fed signals a June/July hike in rates is not out of the question. A reinsertion of a “balanced” or “nearly balanced” risk assessment in the statement will be a significant signal of a shift towards an imminent hike in rates.”