1 May 2014
Little market moves after the FOMC statement – Danske Bank
FXStreet (Edinburgh) - Chief Analyst Allan von Mehren at Danske Bank, remarks yesterday’s FOMC meeting passed almost unnoticed by markets.
Key Quotes
“The Fed statement last night had very little market impact as there were only few changes to the statement. As expected the Fed nodded at the recent improvement of data but otherwise kept the wording unchanged”.
“As expected, the Fed tapered another USD10bn divided on USD5bn on both treasuries and mortgages”.
“Finally, the Fed removed the last paragraph where in March it mentioned that the forward guidance had been changed. It is no longer a change and hence natural to remove this part.
“Kocherlakota did not dissent at this meeting as he did in March. Vote was unanimous”.
“The Fed continues on autopilot, tapering USD10bn per meeting and is unlikely to change the rate projections as long as data is in line with its scenario as is currently the case”.
“Key for the Fed will be employment growth and how fast the unemployment rate declines. We look for job growth to rise to a 250k pace per month in H2, which is likely to lead to a bit more risk premium in the money market curve, which is currently on the low side of what the Fed is guiding in its projections”.
Key Quotes
“The Fed statement last night had very little market impact as there were only few changes to the statement. As expected the Fed nodded at the recent improvement of data but otherwise kept the wording unchanged”.
“As expected, the Fed tapered another USD10bn divided on USD5bn on both treasuries and mortgages”.
“Finally, the Fed removed the last paragraph where in March it mentioned that the forward guidance had been changed. It is no longer a change and hence natural to remove this part.
“Kocherlakota did not dissent at this meeting as he did in March. Vote was unanimous”.
“The Fed continues on autopilot, tapering USD10bn per meeting and is unlikely to change the rate projections as long as data is in line with its scenario as is currently the case”.
“Key for the Fed will be employment growth and how fast the unemployment rate declines. We look for job growth to rise to a 250k pace per month in H2, which is likely to lead to a bit more risk premium in the money market curve, which is currently on the low side of what the Fed is guiding in its projections”.