mercredi 18 mars 2015
What To Expect From FOMC? - Views From 20 Major Banks
Posted on 06:21 by nice news
The following are the expectations for today's FOMC March meeting and Fed's Yellen press conference as provided by the economists at 20 major banks.
Morgan Stanley: There are three points in focus: First, the Fed will take the word ‘patient’ out of the statement trying to regain flexibility. Markets have priced in this likely change. Consequently, its supportive impact on the USD will be minor. Second, the Fed will update its dots. Third, the Fed may consider the impact the higher USD has on import prices. Latest statements referred to “international risks” where USD strength plays....Should the Fed refer to import prices and the valuation of the USD explicitly, then the market would conclude that ‘the Fed is having an issue with current USD upward momentum’. Hence, the USD may experience some vulnerability around the release of the Fed statement.
Goldman: We expect the Committee to drop ‘patient’ from its ‘forward guidance’ and suggest that the timing and pace of hikes will depend on incoming macro information, but be gradual initially. The Summary of Economic Projections—released alongside the FOMC statement—will likely show a mark-down of the 2015 inflation forecast, reflecting the drop in oil prices. We also expect participants' estimates of the structural rate of unemployment will likely be revised lower, indicating greater remaining slack, and a modest reduction in the ‘dots’ On balance, we think that the announcements will not be a large surprise for the front-end of the Dollar curve, although the risks remain skewed to the the upside.
Deutsche Bank: We believe Yellen will almost certainly not remark on the USD underlying value (which is the purview of the US Treasury); and again will talk most about the USD in the context of US financial conditions or net exports.
Morgan Stanley: There are three points in focus: First, the Fed will take the word ‘patient’ out of the statement trying to regain flexibility. Markets have priced in this likely change. Consequently, its supportive impact on the USD will be minor. Second, the Fed will update its dots. Third, the Fed may consider the impact the higher USD has on import prices. Latest statements referred to “international risks” where USD strength plays....Should the Fed refer to import prices and the valuation of the USD explicitly, then the market would conclude that ‘the Fed is having an issue with current USD upward momentum’. Hence, the USD may experience some vulnerability around the release of the Fed statement.
Goldman: We expect the Committee to drop ‘patient’ from its ‘forward guidance’ and suggest that the timing and pace of hikes will depend on incoming macro information, but be gradual initially. The Summary of Economic Projections—released alongside the FOMC statement—will likely show a mark-down of the 2015 inflation forecast, reflecting the drop in oil prices. We also expect participants' estimates of the structural rate of unemployment will likely be revised lower, indicating greater remaining slack, and a modest reduction in the ‘dots’ On balance, we think that the announcements will not be a large surprise for the front-end of the Dollar curve, although the risks remain skewed to the the upside.
Deutsche Bank: We believe Yellen will almost certainly not remark on the USD underlying value (which is the purview of the US Treasury); and again will talk most about the USD in the context of US financial conditions or net exports.
What To Expect From FOMC? - Views From 20 Major Banks
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