19 Jun 2014
Fed disappointed markets hawks – Danske Bank
FXStreet (Edinburgh) - The FOMC statement and subsequent press conference by Chairwoman Janet Yellen was tilted to the dovish camp, weighing on the USD, noted Sverre Holbek, Senior Analyst at Danske Bank.
Key Quotes
“As expected, the Fed last night stayed the course on tapering, reducing monthly purchases by another USD10bn, and the wording of the statement was also largely status quo”.
“Notably, the comments on inflation were left unchanged and when asked about the recent increase during the press conference, Chairman Yellen dismissed it as partly ‘noise’”.
“More significant changes were made to the ‘dot plots’, revising higher the median projections for policy rate up 25bp to 2.50% by end-2016. In comparison, the market prices only 1.80%, pointing to upside risks to US rates from the Fed’s tightening schedule”.
“Nonetheless, the median projection for the long-run rate was revised down 25bp to 3.75%”.
Key Quotes
“As expected, the Fed last night stayed the course on tapering, reducing monthly purchases by another USD10bn, and the wording of the statement was also largely status quo”.
“Notably, the comments on inflation were left unchanged and when asked about the recent increase during the press conference, Chairman Yellen dismissed it as partly ‘noise’”.
“More significant changes were made to the ‘dot plots’, revising higher the median projections for policy rate up 25bp to 2.50% by end-2016. In comparison, the market prices only 1.80%, pointing to upside risks to US rates from the Fed’s tightening schedule”.
“Nonetheless, the median projection for the long-run rate was revised down 25bp to 3.75%”.