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29 Jul 2015
FOMC meeting takes centre stage today – Deutsche Bank
FXStreet (Edinburgh) - Analyst Jim Reid at Deutsche Bank gives his views on today’s key FOMC gathering.
Key Quotes
“I suspect the range of outcomes for the Fed tonight will be narrower”.
“As DB's Peter Hooper has suggested, the statement (no press conference) is likely to give themselves maximum flexibility to react to data in the weeks ahead, including two employment reports, the employment cost index, and a host of data on consumer and business spending, as well as inflation-related developments”.
“The Q2 GDP numbers and historical revisions (tomorrow) will be of interest for what they show about PCE inflation as well as spending and output. Having said all this it will surely be odd if they don't acknowledge the recent fall in commodities”.
“As DB's Joe LaVorgna points out the current -29% year-over-year drop in the CRB index implies YoY headline CPI inflation falling from 0.1% to -0.9% (all other things being equal) over the next couple of months, which would be the largest year-over-year drop since September 2009 (-1.3%) and one of the lowest prints in modern history”.
“However core YoY CPI inflation is likely to edge above 2% in the months ahead which complicates matters. So the Fed have plenty to think about but today they'll likely defer the decision”.
Key Quotes
“I suspect the range of outcomes for the Fed tonight will be narrower”.
“As DB's Peter Hooper has suggested, the statement (no press conference) is likely to give themselves maximum flexibility to react to data in the weeks ahead, including two employment reports, the employment cost index, and a host of data on consumer and business spending, as well as inflation-related developments”.
“The Q2 GDP numbers and historical revisions (tomorrow) will be of interest for what they show about PCE inflation as well as spending and output. Having said all this it will surely be odd if they don't acknowledge the recent fall in commodities”.
“As DB's Joe LaVorgna points out the current -29% year-over-year drop in the CRB index implies YoY headline CPI inflation falling from 0.1% to -0.9% (all other things being equal) over the next couple of months, which would be the largest year-over-year drop since September 2009 (-1.3%) and one of the lowest prints in modern history”.
“However core YoY CPI inflation is likely to edge above 2% in the months ahead which complicates matters. So the Fed have plenty to think about but today they'll likely defer the decision”.