18 Feb 2016
Fed likely to stay on hold until September - Danske
According to Mikael Olai Milhøj, analyst at Danske Bank, yesterday’s minutes from the latest FOMC meeting where on the dovish side and make it difficult to see another hike at least until June.
Key Quotes:
“While it was unclear exactly how to interpret the statement as per usual, the minutes were definitely to the dovish side and based on the minutes it is hard to see another hike at least until June.”
“In general, the Fed was not sure how to interpret the developments in the economy and in the financial markets since the initial lift-off in December. We continue to believe that the Fed will stay on hold until September due to continued stress in financial markets short-term and rising risk of a systemic crisis. The Fed will not risk tightening too much, too quickly”.
“The minutes reveal that the labour market continues to be one of the few bright spots left in the Fed’s chart book.”
“Overall, the Fed was dovish as it was not confident how to interpret the recent financial turmoil, the weaker-than-expected data and falling inflation expectations. The Fed recognises it needs more data before making a more thorough analysis in connection with the March meeting and the updated projections.”
Key Quotes:
“While it was unclear exactly how to interpret the statement as per usual, the minutes were definitely to the dovish side and based on the minutes it is hard to see another hike at least until June.”
“In general, the Fed was not sure how to interpret the developments in the economy and in the financial markets since the initial lift-off in December. We continue to believe that the Fed will stay on hold until September due to continued stress in financial markets short-term and rising risk of a systemic crisis. The Fed will not risk tightening too much, too quickly”.
“The minutes reveal that the labour market continues to be one of the few bright spots left in the Fed’s chart book.”
“Overall, the Fed was dovish as it was not confident how to interpret the recent financial turmoil, the weaker-than-expected data and falling inflation expectations. The Fed recognises it needs more data before making a more thorough analysis in connection with the March meeting and the updated projections.”