29 Jan 2015
Fed: Expecting it to take somewhat longer than before - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank noted how the FOMC acknowledged that inflation has declined further below the 2.0% target and that market-based measures of inflation compensation have declined substantially in recent months.
Key Quotes:
"What’s more, the Committee now anticipates inflation to decline further in the near term."
"However, the FOMC said that the decline in inflation largely (in December they said ‘partly’) reflected declines in energy prices and expects inflation to rise gradually toward target over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate."
"The introduction of ‘medium term’ in the statement indicates that they now expect it to take somewhat longer than before, which seems logical now that they expect inflation to decline further in the near term. Of course, the Committee repeated its disclaimer that it continues to monitor inflation developments closely."
"The FOMC upgraded its assessment of the real economy. Economic activity had been expanding at a solid pace, instead of a moderate pace as in the previous statement. Job gains are now seen as strong instead of solid. They also added that recent declines in energy prices have boosted household purchasing power."
"While the Committee repeated that business fixed investment is advancing, they added international developments to the range of information that they will take into account in determining how long to maintain the current target range for the federal funds rate. The accumulating evidence that US businesses are starting to feel the global economic slowdown and the appreciation of the US dollar has not gone unnoticed."
"As the three dissenting voters at the December meeting have no voting rights in 2015, there were no dissenting votes this month."
"This meeting did not include an update of economic projections or a press conference by Chair Janet Yellen, there was only the FOMC statement."
Key Quotes:
"What’s more, the Committee now anticipates inflation to decline further in the near term."
"However, the FOMC said that the decline in inflation largely (in December they said ‘partly’) reflected declines in energy prices and expects inflation to rise gradually toward target over the medium term as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate."
"The introduction of ‘medium term’ in the statement indicates that they now expect it to take somewhat longer than before, which seems logical now that they expect inflation to decline further in the near term. Of course, the Committee repeated its disclaimer that it continues to monitor inflation developments closely."
"The FOMC upgraded its assessment of the real economy. Economic activity had been expanding at a solid pace, instead of a moderate pace as in the previous statement. Job gains are now seen as strong instead of solid. They also added that recent declines in energy prices have boosted household purchasing power."
"While the Committee repeated that business fixed investment is advancing, they added international developments to the range of information that they will take into account in determining how long to maintain the current target range for the federal funds rate. The accumulating evidence that US businesses are starting to feel the global economic slowdown and the appreciation of the US dollar has not gone unnoticed."
"As the three dissenting voters at the December meeting have no voting rights in 2015, there were no dissenting votes this month."
"This meeting did not include an update of economic projections or a press conference by Chair Janet Yellen, there was only the FOMC statement."