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27 Jan 2015
FOMC: The bottom line - BBH
FXStreet (Guatemala) - In respect of the forthcoming FOMC and variables over conditions set for a rate hike in the US, Analysts at Brown Brothers Harriman explained that it is not clear when the next economic downturn will begin, though we can feel fairly confident that it won’t be this year.
Key Quotes:
"The Federal Reserve needs to create the conditions to allow it to cut rates then rather than resort to new asset purchases. In order to do this it needs to raise rates. This can be parodied as saying rates have to be raised so they can be cut, but it does not do this argument justice."
"The bottom line is that the January FOMC meeting will most likely pass without much impact."
"Clearer indication of the Fed’s intention in Q2 will have to wait for the March meeting. While some observers are getting cold feet, we continue to think that a June hike remains the most likely scenario."
"If we are wrong, it is that the hike is delivered in September instead."
"Regardless of the exact timing, the US economy and the Federal Reserve are well ahead of most of the major central banks in the larger business cycle."
Key Quotes:
"The Federal Reserve needs to create the conditions to allow it to cut rates then rather than resort to new asset purchases. In order to do this it needs to raise rates. This can be parodied as saying rates have to be raised so they can be cut, but it does not do this argument justice."
"The bottom line is that the January FOMC meeting will most likely pass without much impact."
"Clearer indication of the Fed’s intention in Q2 will have to wait for the March meeting. While some observers are getting cold feet, we continue to think that a June hike remains the most likely scenario."
"If we are wrong, it is that the hike is delivered in September instead."
"Regardless of the exact timing, the US economy and the Federal Reserve are well ahead of most of the major central banks in the larger business cycle."