19 Feb 2015
Strong jobs data in Feb might keep Fed’s mid-year rate hike on course – Danske
FXStreet (Barcelona) - Signe Roed-Frederiksen, Senior Analyst at Danske Bank, comments that an upbeat employment data and stable inflation indicators in February might keep the mid-year rate hike by Fed in the picture.
Key Quotes
“Data received since the FOMC meeting on 28 January includes the January employment report, which was very strong. However, we doubt that one data point is enough to turn the Committee’s sentiment, in particular when inflation indicators continue to be soft. This challenges our call that the Fed will remove ‘patient’ from the statement in March and raise the fed funds rate this summer.”
“If February data on employment continue to show solid improvement and inflation indicators stabilise, we continue to believe the Fed would like to have the flexibility to raise rates in June.”
“Hence, ‘patient’ should be dropped in March but will be combined with soft comments from Janet Yellen and lower economic projections in order to keep the market reaction moderate.”
Key Quotes
“Data received since the FOMC meeting on 28 January includes the January employment report, which was very strong. However, we doubt that one data point is enough to turn the Committee’s sentiment, in particular when inflation indicators continue to be soft. This challenges our call that the Fed will remove ‘patient’ from the statement in March and raise the fed funds rate this summer.”
“If February data on employment continue to show solid improvement and inflation indicators stabilise, we continue to believe the Fed would like to have the flexibility to raise rates in June.”
“Hence, ‘patient’ should be dropped in March but will be combined with soft comments from Janet Yellen and lower economic projections in order to keep the market reaction moderate.”