A cautious FOMC is expected this week – TDS

The team of Rates, FX and Commodities at TD Securities expects the FOMC meeting to keep the cautious tone at this Wednesday’s meeting.

Key Quotes

“A sharp rebound in financial conditions following the UK Referendum and firming US data (including strong nonfarm payrolls) will help the Federal Reserve sound marginally more confident in the outlook”.

“However, with the wider fallout from Brexit a key source of medium-term uncertainty and very low inflation expectations, a still cautious tone will be reflected in the post meeting statement”.

“A risk management approach to monetary policy will likely delay the next hike until June 2017 and the hurdle to hike earlier remains high”.