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FED to take a more cautions line - Lloyds Bank

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 22, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - Analysts from Lloyds Bank, the Federal Reserve will take a caution line awaiting further economic data, on Wednesday , when the FOMC 2-day meeting ends.

    Key Quotes:

    “The US central bank’s policy committee meets for the first time this year (Wed). As it is only a few weeks since the Fed hiked interest rates, a policy change at this meeting has always been very unlikely.”

    “More of an issue is whether the FOMC will use its post-meeting statement to signal a significant probability of another rate rise in March. Certainly, coming into 2015, the majority of FOMC members seemed to be signalling the likelihood of more interest rate increases in 2016 than were reflected in market pricing and that a March move was a strong possibility.”

    “Given market volatility and mixed economic data over the past few weeks it now looks as though the FOMC will take a more cautious line. Indeed, what may be of more interest in the coming week is the extent to which the FOMC acknowledges that the downside risks for economic growth and inflation have increased. That does not, however, completely rule out a March interest rate rise if markets settle down and economic data improve.
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