10 Oct 2013
Flash: weight on US near term – BTMU
FXstreet.com (London) - Lee Hardman at Bank of Tokyo Mitsubishi said the ongoing government shutdown and looming debt ceiling deadline have resulted in the release of the latest FOMC minutes being viewed as even more backward looking limiting their market impact.
Key Quotes:
“The minutes revealed that FOMC participants were divided in their views over whether to begin tapering in September”.
“The decision not to taper was driven by threemain factors: i) that the tightening in financial conditions could
undermine the housing market recovery, ii) uncertainty over the fiscal outlook and impact on their economic projections in the near-term, and iii) incoming economic data since their last meeting was not convincing enough
to be adequately confident of continued progress. “Conditional on their respective economic outlooks, most participants judged that it would likely be appropriate to begin to reduce the pace of the committee’s purchases of
long-term securities this year and to conclude in the middle of 2014””.
“The subsequent negative hit to growth from the ongoing government shutdown and from uncertainty relating to the debt ceiling is likely to result in the Fed delaying tapering QE further which remains a weight upon the US dollarin the near-term”.
Key Quotes:
“The minutes revealed that FOMC participants were divided in their views over whether to begin tapering in September”.
“The decision not to taper was driven by threemain factors: i) that the tightening in financial conditions could
undermine the housing market recovery, ii) uncertainty over the fiscal outlook and impact on their economic projections in the near-term, and iii) incoming economic data since their last meeting was not convincing enough
to be adequately confident of continued progress. “Conditional on their respective economic outlooks, most participants judged that it would likely be appropriate to begin to reduce the pace of the committee’s purchases of
long-term securities this year and to conclude in the middle of 2014””.
“The subsequent negative hit to growth from the ongoing government shutdown and from uncertainty relating to the debt ceiling is likely to result in the Fed delaying tapering QE further which remains a weight upon the US dollarin the near-term”.