19 Feb 2015
Fed may remain "patient"...Right up until the last minute – DB
FXStreet (Barcelona) - Economists at Deutsche Bank, view that Fed might retain “patient” in its March meeting, but also keep the flexibility to begin a June rate hike.
Key Quotes
“The most interesting take-away from the January FOMC meeting minutes was the discussion of the forward-guidance language. As the minutes state, “Many participants regarded dropping the “patient” language in the statement, whenever that might occur, as risking a shift in market expectations for the beginning of policy firming toward an unduly narrow range of dates”.”
“In our view, this means the Fed is worried about losing flexibility with respect to the timing of the initial rate hike.”
“Thus, the Fed may keep “patient” in the March meeting statement, while retaining the flexibility to begin hiking in June.”
“In other words, they may look for a more nuanced way of communicating the opening of the window for liftoff in June without strongly committing to a specific date too far ahead of time.”
Key Quotes
“The most interesting take-away from the January FOMC meeting minutes was the discussion of the forward-guidance language. As the minutes state, “Many participants regarded dropping the “patient” language in the statement, whenever that might occur, as risking a shift in market expectations for the beginning of policy firming toward an unduly narrow range of dates”.”
“In our view, this means the Fed is worried about losing flexibility with respect to the timing of the initial rate hike.”
“Thus, the Fed may keep “patient” in the March meeting statement, while retaining the flexibility to begin hiking in June.”
“In other words, they may look for a more nuanced way of communicating the opening of the window for liftoff in June without strongly committing to a specific date too far ahead of time.”