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18 Mar 2015
Key message will be that Fed will hike rates meeting-by-meeting basis – KBC
FXStreet (Barcelona) - The KBC Bank Research Team views that Fed might remove its ‘patient’ view today, and the key message of Yellen would be that Fed would hike rates on a meeting-to-meeting basis.
Key Quotes
“Today, the only thing that matters is the outcome of the FOMC meeting and Yellen’s press conference. The past couple of days, (US) investors got cold feet into the FOMC’s verdict.”
“US Treasuries moved higher in the sideways range between 126-12+ and 128-04+/12+, outperforming Bunds. The upward bias of the US Note future is expected to remain, but like yesterday moves will be limited.”
“Regarding the outcome of the FOMC-meeting, we think that the Fed will drop the forward guidance, preparing for a June rate hike. That should open the way to the downside of the trading range (125-30+).”
“A break lower will likely be a tough nut to crack initially as Yellen will likely downplay the importance of dropping the guidance. The front end of the US yield curve should underperform, flattening the curve.”
“FOMC dots and forecasts for growth/inflation/employment are wildcards. The main message will be that the Fed could hike rates on a meeting-by-meeting basis, increasing volatility and pushing US rates higher.”
Key Quotes
“Today, the only thing that matters is the outcome of the FOMC meeting and Yellen’s press conference. The past couple of days, (US) investors got cold feet into the FOMC’s verdict.”
“US Treasuries moved higher in the sideways range between 126-12+ and 128-04+/12+, outperforming Bunds. The upward bias of the US Note future is expected to remain, but like yesterday moves will be limited.”
“Regarding the outcome of the FOMC-meeting, we think that the Fed will drop the forward guidance, preparing for a June rate hike. That should open the way to the downside of the trading range (125-30+).”
“A break lower will likely be a tough nut to crack initially as Yellen will likely downplay the importance of dropping the guidance. The front end of the US yield curve should underperform, flattening the curve.”
“FOMC dots and forecasts for growth/inflation/employment are wildcards. The main message will be that the Fed could hike rates on a meeting-by-meeting basis, increasing volatility and pushing US rates higher.”