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8 Jan 2015
Evan's brings on the noise from the FOMC - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman explained that the Chicago Federal Reserve President Evans, a voting member this year of the FOMC, spoke yesterday.
Key Quotes:
"Evans is often placed on the dovish side of the Fed. While recognizing signs of strong growth in the US, he urged patience on raising rates. He warned that the Fed's inflation target might not be reached until 2018".
"Evans indicated he was one of the two Fed officials who does not expect the Fed to raise rates this year, according to the last month's dot-plot. He went further, claiming that it would be a "catastrophe" to raise rates".
"This is not the signal for investors".
"The clearest signal came from the FOMC statement and Yellen's press conference. The signal was not totally obscured by in the minutes that were published yesterday. That signal is that provided that the labor market continues to improve that a rater hike near the middle of the year remains the most likely scenario, even if price pressures are not closer to the Fed's target. We note that the last tightening cycle began with the core PCE deflator near current levels. There was not a formal target at the time, but it is still an instructive example".
Key Quotes:
"Evans is often placed on the dovish side of the Fed. While recognizing signs of strong growth in the US, he urged patience on raising rates. He warned that the Fed's inflation target might not be reached until 2018".
"Evans indicated he was one of the two Fed officials who does not expect the Fed to raise rates this year, according to the last month's dot-plot. He went further, claiming that it would be a "catastrophe" to raise rates".
"This is not the signal for investors".
"The clearest signal came from the FOMC statement and Yellen's press conference. The signal was not totally obscured by in the minutes that were published yesterday. That signal is that provided that the labor market continues to improve that a rater hike near the middle of the year remains the most likely scenario, even if price pressures are not closer to the Fed's target. We note that the last tightening cycle began with the core PCE deflator near current levels. There was not a formal target at the time, but it is still an instructive example".