1 Aug 2013
Flash: FOMC disappoints – BBH
FXstreet.com (Barcelona) - Marc Chandler, Global Head of Currency Strategy at BROWN BROTHERS HARRIMAN said FOMC disappointed.
Key Quotes:
“With many observers expecting the Fed to taper in September, disappointment that there was nothing in the statement to support such ideas has seen the dollar fall and the stocks and bonds traded higher”.
“The main change in the statement appears to be greater recognition of the risk of deflation”.
“This essentially co-opted Bullard, who did not dissent dovishly as he did in June. George continued with her hawkish dissent”.
“The Fed's assessment of the economy was tweaked, recognizing that mortgage rates have increase and fiscal policy is still offering restraint to the economy. Measured inflation was below the Fed's long-term expectations, but it noted again that expectations remain stable”.
“The Fed sticks with its forecast that the economy will strengthen, though it continues to recognize downside risks. Next month when the Fed provides new economic forecasts, it will likely have to walk back from its optimism”.
Key Quotes:
“With many observers expecting the Fed to taper in September, disappointment that there was nothing in the statement to support such ideas has seen the dollar fall and the stocks and bonds traded higher”.
“The main change in the statement appears to be greater recognition of the risk of deflation”.
“This essentially co-opted Bullard, who did not dissent dovishly as he did in June. George continued with her hawkish dissent”.
“The Fed's assessment of the economy was tweaked, recognizing that mortgage rates have increase and fiscal policy is still offering restraint to the economy. Measured inflation was below the Fed's long-term expectations, but it noted again that expectations remain stable”.
“The Fed sticks with its forecast that the economy will strengthen, though it continues to recognize downside risks. Next month when the Fed provides new economic forecasts, it will likely have to walk back from its optimism”.