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7 Jan 2015
Fed's minutes: Awaiting clarification over timing of tightening - RBS
FXStreet (Bali) - RBS FX Strategists await a potential clarification or expansion over the timing of tightening by the Fed during today's minutes.
Key Quotes
"In the US, ADP releases its own estimate for private payrolls ahead of US payrolls on Friday, and the US releases December trade figures. Later in the session, the FOMC releases minutes from its December monetary policy meeting as well. The December decision included a post-decision statement, new economic projections, a fresh “dot point” Fed Funds rate projection table, and a press conference by Chair Yellen."
"As a result, market participants already have most of the important conclusions and discussion points that went into the decision to alter its forward guidance language on the Fed Funds rate. To be sure, the debate around these conclusions is almost always notable. In particular, we will be watching for any discussion of inflation expectations."
"In her press conference, Chair Yellen said the FOMC does not need inflation rates to rise before hiking the Fed Funds rate, but instead needs “a feeling of reasonable confidence that when we start the process of normalizing policy, that it will be moving up over time.”
"This was, in our view, a significant hawkish development, and we await any potential clarification or expansion of this idea within the minutes. Also of note will be debates over international conditions and oil prices, though Chair Yellen’s press conference suggests that the Fed remains unperturbed by risks to growth emanating from abroad."
Key Quotes
"In the US, ADP releases its own estimate for private payrolls ahead of US payrolls on Friday, and the US releases December trade figures. Later in the session, the FOMC releases minutes from its December monetary policy meeting as well. The December decision included a post-decision statement, new economic projections, a fresh “dot point” Fed Funds rate projection table, and a press conference by Chair Yellen."
"As a result, market participants already have most of the important conclusions and discussion points that went into the decision to alter its forward guidance language on the Fed Funds rate. To be sure, the debate around these conclusions is almost always notable. In particular, we will be watching for any discussion of inflation expectations."
"In her press conference, Chair Yellen said the FOMC does not need inflation rates to rise before hiking the Fed Funds rate, but instead needs “a feeling of reasonable confidence that when we start the process of normalizing policy, that it will be moving up over time.”
"This was, in our view, a significant hawkish development, and we await any potential clarification or expansion of this idea within the minutes. Also of note will be debates over international conditions and oil prices, though Chair Yellen’s press conference suggests that the Fed remains unperturbed by risks to growth emanating from abroad."