28 Oct 2013
Flash: FOMC Preview - Managing the Monetary Punch Bowl – TD Securities
FXstreet.com (London) - Eric Green, Global Head of Rates, FX & Commodity Research at TD Securities said the October meeting is likely to prove uneventful.
Key Quotes:
"Nevertheless, there is a fair amount of uncertainty as to the mindset of policymakers. Some even suggest the Fed may never taper, or soon signal an increase in asset purchases”.
"The big risk for the market is not that the Fed signals looser policy. The bigger risk is the view that tapering may come at any time, even if we suspect calendar effects suggest that time will not come until next March”.
"One should not be complacent on tapering owing to a Yellen Fed. Forward guidance is her comfort zone, not QE. Positive economic math is emerging and the pivot point to growth is still tilted higher”.
"If Yellen is more hawkish than presumed on tapering, she is more dovish than most presume on rate hikes”.
"Rate expectations may be brought forward by tapering, but will ultimately reverse. That caps medium-term upside in rates (10yr) south of 3.00%, but shouldn’t breed complacency at 2.50%”.
Key Quotes:
"Nevertheless, there is a fair amount of uncertainty as to the mindset of policymakers. Some even suggest the Fed may never taper, or soon signal an increase in asset purchases”.
"The big risk for the market is not that the Fed signals looser policy. The bigger risk is the view that tapering may come at any time, even if we suspect calendar effects suggest that time will not come until next March”.
"One should not be complacent on tapering owing to a Yellen Fed. Forward guidance is her comfort zone, not QE. Positive economic math is emerging and the pivot point to growth is still tilted higher”.
"If Yellen is more hawkish than presumed on tapering, she is more dovish than most presume on rate hikes”.
"Rate expectations may be brought forward by tapering, but will ultimately reverse. That caps medium-term upside in rates (10yr) south of 3.00%, but shouldn’t breed complacency at 2.50%”.