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9 Jan 2014
Flash: FOMC minutes hawkish - BBH
FXstreet.com (Guatemala) - Strategists at Brown Brothers Harriman commented on the FOMC minutes that were released yesterday.
Key Quotes:
“The immediate new news is that Fed officials saw the asset purchases as being less effective. Officials generally were impressed by the stronger jobs gains and other signs of economic improvement. There was some talk of a lower unemployment threshold (not target or trigger), but the majority was opposed”.
“It appears the most heated part of the discussions was over the pace of tapering. The more hawkish wing wanted faster tapering. In the end the Fed said that tapering would be "measured" and depending on the course of the economy”.
“Bernanke, in the press conference, had suggested purchases would be complete by the end of the year. To us, this means that the size of the Fed's balance sheet will not peak for a couple of quarters”.
“Remember, the Fed says the easing impact of QE lies with the stock of assets it has bought, not with the flow of incremental purchases. Bottom line: the pace of tapering not tapering itself will be the likely source of uncertainty going forward”.
“On balance, it strikes us that the minutes were little more hawkish than anticipated”.
Key Quotes:
“The immediate new news is that Fed officials saw the asset purchases as being less effective. Officials generally were impressed by the stronger jobs gains and other signs of economic improvement. There was some talk of a lower unemployment threshold (not target or trigger), but the majority was opposed”.
“It appears the most heated part of the discussions was over the pace of tapering. The more hawkish wing wanted faster tapering. In the end the Fed said that tapering would be "measured" and depending on the course of the economy”.
“Bernanke, in the press conference, had suggested purchases would be complete by the end of the year. To us, this means that the size of the Fed's balance sheet will not peak for a couple of quarters”.
“Remember, the Fed says the easing impact of QE lies with the stock of assets it has bought, not with the flow of incremental purchases. Bottom line: the pace of tapering not tapering itself will be the likely source of uncertainty going forward”.
“On balance, it strikes us that the minutes were little more hawkish than anticipated”.