Back
18 Sep 2013
Flash: What to watch for at the FOMC? - Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Head of FX Strategy at Societe Generale, in a note to clients, explains the three main points to the FOMC announcement and press conference.
Key Quotes
"The first is that the size of the ‘tapering’ will be announced. Unless there is a he shock and they delay, the actual size matters little. We expect them to finish tapering in March, in time for the unemployment rate to fall below 7%. The second is the ‘tapering isn’t tightening’ dovish commentary from Ben Bernanke. The third is the Fed Funds profile, out to 2016 that accompanies the announcement. It’s a series of dots, representing the FOMC voters’ views. My guess? Perhaps we will see a higher ‘high’."
"The Fed has a problem in that a bullish growth assessment isn‘t consistent with a low rate profile, but individual members’ forecasts don’t have to add up to the bullish message. This is the main reason however, for caution in the next 48 hours – this is where asset market bulls could be disappointed. I’ll stay short Gilts vs Treasuries, long European credit and long GBP vs JPY, CHF."
Key Quotes
"The first is that the size of the ‘tapering’ will be announced. Unless there is a he shock and they delay, the actual size matters little. We expect them to finish tapering in March, in time for the unemployment rate to fall below 7%. The second is the ‘tapering isn’t tightening’ dovish commentary from Ben Bernanke. The third is the Fed Funds profile, out to 2016 that accompanies the announcement. It’s a series of dots, representing the FOMC voters’ views. My guess? Perhaps we will see a higher ‘high’."
"The Fed has a problem in that a bullish growth assessment isn‘t consistent with a low rate profile, but individual members’ forecasts don’t have to add up to the bullish message. This is the main reason however, for caution in the next 48 hours – this is where asset market bulls could be disappointed. I’ll stay short Gilts vs Treasuries, long European credit and long GBP vs JPY, CHF."