10 Jul 2013
Flash: FOMC expected to build hawkish tone – Deutsche Bank
FXstreet.com (New York) - Fed tapering is set to dominate the discussion again today with the release of minutes from the FOMC's June 19th meeting, notes Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank.
Recall that this was the meeting, which concluded with the statement that the FOMC sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. “We expect the latest minutes to build upon the hawkish tone of the previous meeting where a number of participants expressed willingness to adjust the flow of (asset) purchases as early as the June meeting.”
However, “we also think a July tapering is premature as there is no urgency in tapering so soon. It makes more sense to see what the upcoming GDP revisions show and how budget negotiations unfold. In addition to that, policymakers will not have the July employment report when they meet later this month.” they add.
Recall that this was the meeting, which concluded with the statement that the FOMC sees the downside risks to the outlook for the economy and the labor market as having diminished since the fall. “We expect the latest minutes to build upon the hawkish tone of the previous meeting where a number of participants expressed willingness to adjust the flow of (asset) purchases as early as the June meeting.”
However, “we also think a July tapering is premature as there is no urgency in tapering so soon. It makes more sense to see what the upcoming GDP revisions show and how budget negotiations unfold. In addition to that, policymakers will not have the July employment report when they meet later this month.” they add.