20 Mar 2015
Mixed messages from the Fed confounding banks – Blueprint Capital
FXStreet (Barcelona) - The Blueprint FX Team comments that the Fed’s real intention is possibly to appear as if they are moving in the direction to hike rates, which has perplexed the banks.
Key Quotes
“Bond investors seem to be betting that the Fed’s real intention is to appear that they are moving forward in hiking rates but actually they are quite happy with things the way they are. Thus, undeterred by the Fed’s ditched pledge to be patient about lifting rates, plenty of the smart money is on US rates staying near historic lows.”
“However, these mixed messages are confounding banks too; even the top chiefs at Goldman Sachs have different views on when the Fed will act and how they should position themselves.”
“Industry execs have been hoping for an interest rate rise for years as it would boost profits – but they’re still not sure if their hopes are about to be fulfilled.”
“Finally, there is the ever-looming threat of creating another, as ye unforeseen, asset price bubble. Interesting times indeed!”
Key Quotes
“Bond investors seem to be betting that the Fed’s real intention is to appear that they are moving forward in hiking rates but actually they are quite happy with things the way they are. Thus, undeterred by the Fed’s ditched pledge to be patient about lifting rates, plenty of the smart money is on US rates staying near historic lows.”
“However, these mixed messages are confounding banks too; even the top chiefs at Goldman Sachs have different views on when the Fed will act and how they should position themselves.”
“Industry execs have been hoping for an interest rate rise for years as it would boost profits – but they’re still not sure if their hopes are about to be fulfilled.”
“Finally, there is the ever-looming threat of creating another, as ye unforeseen, asset price bubble. Interesting times indeed!”