29 Jan 2015
FOMC remains in patience mode - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted the theme around the FOMC earlier over in the US session.
Key Quotes:
"The continued reduction in various measures of unemployment and stable inflation expectations in consumer surveys are still giving the FOMC the confidence that over time inflation will move back to target. This implies that they are still thinking of a mid-2015 rate hike."
"However, rapid disinflation, wage deceleration and depressed market inflation expectations are testing the confidence of various FOMC participants. Also, corporate America is starting to feel the headwinds from a weaker global economy and a stronger US dollar".
"In our view, the FOMC will not be able to tick all the boxes by summer, which will lead to a delay in the first rate hike from mid-2015 to 2015Q4, similar to the delay in tapering in 2013."
Key Quotes:
"The continued reduction in various measures of unemployment and stable inflation expectations in consumer surveys are still giving the FOMC the confidence that over time inflation will move back to target. This implies that they are still thinking of a mid-2015 rate hike."
"However, rapid disinflation, wage deceleration and depressed market inflation expectations are testing the confidence of various FOMC participants. Also, corporate America is starting to feel the headwinds from a weaker global economy and a stronger US dollar".
"In our view, the FOMC will not be able to tick all the boxes by summer, which will lead to a delay in the first rate hike from mid-2015 to 2015Q4, similar to the delay in tapering in 2013."