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15 Dec 2014
FOMC changes to forward guidance expected - Nomura
FXStreet (Guatemala) - The Global Markets Research team at Nomura explained that they expect the FOMC to make changes to its “forward guidance” when it meets next week for the final time in 2014.
Key Quotes:
“In particular, we expect the FOMC to drop the statement that it expects to maintain its 0 to ¼ percent target for the federal funds rate for a “considerable time.”In its place, we expect the FOMC to add new language indicating that a hike in short-term interest rates is not imminent”.
“We expect the Committee to continue to stress that future interest rate decisions are “data dependent” and that the path for short-term interest rates is not on a predetermined course”.
“We also expect the FOMC statement to reiterate that, after “liftoff,” the adjustment of short-term interest rates will be relatively slow”.
“The Committee will likely acknowledge that recent declines in oil prices will temporarily lower headline inflation".
But the recent surveys reinforce the Committee‟s judgment that inflation expectations remain well anchored.”
Key Quotes:
“In particular, we expect the FOMC to drop the statement that it expects to maintain its 0 to ¼ percent target for the federal funds rate for a “considerable time.”In its place, we expect the FOMC to add new language indicating that a hike in short-term interest rates is not imminent”.
“We expect the Committee to continue to stress that future interest rate decisions are “data dependent” and that the path for short-term interest rates is not on a predetermined course”.
“We also expect the FOMC statement to reiterate that, after “liftoff,” the adjustment of short-term interest rates will be relatively slow”.
“The Committee will likely acknowledge that recent declines in oil prices will temporarily lower headline inflation".
But the recent surveys reinforce the Committee‟s judgment that inflation expectations remain well anchored.”