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2 Aug 2013
Flash: Fed’s concerns – Societe Generale
FXstreet.com (London) -Kit Juckes, Global Head of Currency Strategy at Societe Generale eyes Fed’s concerns over deflationary pressures.
Key Quotes:
“The Fed’s policy response to falling unemployment and low inflation is firstly to slow bond purchases, secondly to do nothing”.
“The Fed’s obsession with deflation risks will stay their hand for a long time, which probably means less (or no) tightening pre-2016 and more, faster, thereafter”.
“It feels like I want to pay 2yr US rates 2 or even 3-years forwards to catch the prospective kink in the rate path”.
“Markets though, have a knack of looking forwards and pricing things in long before they happen”.
Key Quotes:
“The Fed’s policy response to falling unemployment and low inflation is firstly to slow bond purchases, secondly to do nothing”.
“The Fed’s obsession with deflation risks will stay their hand for a long time, which probably means less (or no) tightening pre-2016 and more, faster, thereafter”.
“It feels like I want to pay 2yr US rates 2 or even 3-years forwards to catch the prospective kink in the rate path”.
“Markets though, have a knack of looking forwards and pricing things in long before they happen”.