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18 Sep 2014
The Fed kept the ‘considerable time’ alive – Danske Bank
FXStreet (Edinburgh) - Jens Pedersen, Senior Analyst at Danske Bank, assessed the recent outcome of the FOMC gathering.
Key Quotes
“Yesterday the Fed, as expected, moved to a slightly more hawkish policy stance”.
“It hung on to its forward guidance of ‘considerable time’ in the statement but projections for the key policy rate were revised markedly higher”.
“The Fed now projects the Fed funds rate to be at 1.375 at the end of 2015, which means the central bank looks set to hike four times next year, probably starting in April. The US stock market greeted the change in Fed’s policy stance with relative ease – it was more or less flat on the day, while the dollar jumped higher – EUR/USD dropped below 1.29 to a new year-low”.
“While the recovery in the US looks to be on track, China and Japan are currently battling an imminent slowdown in economic growth confirmed by key figure releases today”.
“The Japanese foreign trade data were weak. At minus 1.3% y/y and minus 1.5% y/y both exports and imports declined on an annual basis and new-home prices in China fell in August”.
Key Quotes
“Yesterday the Fed, as expected, moved to a slightly more hawkish policy stance”.
“It hung on to its forward guidance of ‘considerable time’ in the statement but projections for the key policy rate were revised markedly higher”.
“The Fed now projects the Fed funds rate to be at 1.375 at the end of 2015, which means the central bank looks set to hike four times next year, probably starting in April. The US stock market greeted the change in Fed’s policy stance with relative ease – it was more or less flat on the day, while the dollar jumped higher – EUR/USD dropped below 1.29 to a new year-low”.
“While the recovery in the US looks to be on track, China and Japan are currently battling an imminent slowdown in economic growth confirmed by key figure releases today”.
“The Japanese foreign trade data were weak. At minus 1.3% y/y and minus 1.5% y/y both exports and imports declined on an annual basis and new-home prices in China fell in August”.