Back
18 Mar 2014
FOMC a focus for changes in forward guidance - TDS
FXStreet (Bali) - As Eric Green, Global Head Rates, FX & Commodity Research at TDS, notes, the March FOMC meeting will be a focus for markets owing less to another $10B taper, which is fully priced in, and more to potential changes in forward guidance.
Key Quotes
"Good chance the Fed moves closer to a qualitative based forward guidance by dropping the 6.5% unemployment rate threshold."
"Dropping that threshold is not likely to have much effect on markets that have already moved beyond the 6.5% threshold as a material guide for rate hikes."
"The SEP projections released at this meeting may gain greater emphasis in how the Fed maps out future policy moves going forward. The Dots already signal a Fed more dovish than market pricing for Fed rate hikes."
"The Fed will make more use of these Dots in setting forward expectations, but for various reasons will not become the focal point for forward guidance."
Key Quotes
"Good chance the Fed moves closer to a qualitative based forward guidance by dropping the 6.5% unemployment rate threshold."
"Dropping that threshold is not likely to have much effect on markets that have already moved beyond the 6.5% threshold as a material guide for rate hikes."
"The SEP projections released at this meeting may gain greater emphasis in how the Fed maps out future policy moves going forward. The Dots already signal a Fed more dovish than market pricing for Fed rate hikes."
"The Fed will make more use of these Dots in setting forward expectations, but for various reasons will not become the focal point for forward guidance."