30 Jan 2014
Flash: FOMC, what's next? - Nomura
FXstreet.com (Bali) - Wednesday's statement from the Federal Open Market Committee (FOMC) provided no notable surprises, notes the North America Economics Team at Nomura.
Key Quotes
"The Committee announced that it would further reduce the pace of its asset purchases by $10bn ($5bn reduction in each MBS and UST purchases) beginning in February, but made no changes to its forward guidance."
"We do not believe that Yellen and the FOMC want monetary policy to be less
accommodative. Consequently, we expect them to continue to try and anchor the front end of the yield curve."
"The fact that inflation has trended lower in recent quarters, and it is now well below the FOMC's target, gives the FOMC a reason to maintain accommodative policy."
"We expect Yellen and the FOMC to increasingly focus forward guidance on keeping interest rates low as long as inflation remains well below target."
"How the FOMC addresses these issues in its upcoming Semiannual Monetary Policy Report and how Yellen addresses them in her upcoming testimony will be important drivers for financial markets."
Key Quotes
"The Committee announced that it would further reduce the pace of its asset purchases by $10bn ($5bn reduction in each MBS and UST purchases) beginning in February, but made no changes to its forward guidance."
"We do not believe that Yellen and the FOMC want monetary policy to be less
accommodative. Consequently, we expect them to continue to try and anchor the front end of the yield curve."
"The fact that inflation has trended lower in recent quarters, and it is now well below the FOMC's target, gives the FOMC a reason to maintain accommodative policy."
"We expect Yellen and the FOMC to increasingly focus forward guidance on keeping interest rates low as long as inflation remains well below target."
"How the FOMC addresses these issues in its upcoming Semiannual Monetary Policy Report and how Yellen addresses them in her upcoming testimony will be important drivers for financial markets."