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31 Oct 2013
Flash: FOMC does just enough to keep taper dream alive - RBS
FXstreet.com (Αthens) - Greg Gibbs, FX Strategist at RBS note that the FOMC statement avoided any down-grade in its overall economic assessment, even though recent data indicate that this was a risk ahead of the statement. It continued to describe the recovery as “moderate”.
Key Quotes
“It also removed the sentence that highlights its concern over tightening financial conditions; implying therefore that they had eased (perhaps a reflection of the further strong stock market gains and lower mortgage yields since the 18 September statement).”
“It also continued say that “improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.””
“The statement does just enough to keep alive the possibility of taper beginning sooner rather than later, suggesting just a bit of improvement in the labour market might get the Fed over the line. However, the reality is that it remains very unclear how much improvement in the labour market is required and whether the Fed may opt to wait out the fiscal uncertainty in Q1 next year before beginning to taper in any case.”
Key Quotes
“It also removed the sentence that highlights its concern over tightening financial conditions; implying therefore that they had eased (perhaps a reflection of the further strong stock market gains and lower mortgage yields since the 18 September statement).”
“It also continued say that “improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy. However, the Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases.””
“The statement does just enough to keep alive the possibility of taper beginning sooner rather than later, suggesting just a bit of improvement in the labour market might get the Fed over the line. However, the reality is that it remains very unclear how much improvement in the labour market is required and whether the Fed may opt to wait out the fiscal uncertainty in Q1 next year before beginning to taper in any case.”