US: Market prices little from the Fed - SocGen

Research Team at Societe Generale, suggests that as the Federal Reserve welcomes the great and good to Wyoming to discuss “Designing resilient monetary policy frameworks for the future”, weaker productivity growth, slower GDP trends and a lower equilibrium for real interest rates will all feature.

Key Quotes

“Resilient frameworks are ones that can cope with these new realities. The inference, that the FOMC will only tighten policy at a funereal pace, is hardly a recipe for a soaring dollar. Yet, the market prices little from the Fed, and a summer spent in indiscriminate yield-hunting has taken the dollar to levels where the mere continuation of steady ‘new normal’ growth is enough to support it.”