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17 Mar 2014
Flash: FOMC preview - Nomura
FXStreet (Bali) - Nomura thinks tapering is set to continue on Wed's FOMC decision, while they also expect the FOMC to continue evolving its forward guidance by dropping the “Evans Rule” thresholds and maintaining other core elements of the current forward guidance.
Key Quotes
"We believe the FOMC's medium-term outlook for the economy has not changed much since its last meeting and it appears to be broadly comfortable with the structure of interest rates and financial conditions."
"We do not believe the FOMC wants to either “tighten” or “ease” its overall stance of monetary policy at this meeting. In that context, we expect the FOMC to stick to its plan for stepping down the pace of asset purchases."
"With the unemployment rate approaching the 6.5% threshold, however, the FOMC is likely to modify its forward guidance. We expect it to drop the “Evans Rule” thresholds, while maintaining other elements of the current forward guidance – including the notion that the committee still believes any increase in short-term rates is still a long way off."
Key Quotes
"We believe the FOMC's medium-term outlook for the economy has not changed much since its last meeting and it appears to be broadly comfortable with the structure of interest rates and financial conditions."
"We do not believe the FOMC wants to either “tighten” or “ease” its overall stance of monetary policy at this meeting. In that context, we expect the FOMC to stick to its plan for stepping down the pace of asset purchases."
"With the unemployment rate approaching the 6.5% threshold, however, the FOMC is likely to modify its forward guidance. We expect it to drop the “Evans Rule” thresholds, while maintaining other elements of the current forward guidance – including the notion that the committee still believes any increase in short-term rates is still a long way off."