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19 Jun 2013
Flash: QE tapering not expected to be announced today – Investec
FXstreet.com (New York) - According to Lee McDarby, Corporate Treasury at Investec, “The market is in a holding pattern as it eagerly awaits the Fed’s monetary policy announcement later tonight at 18:00 GMT, alongside its economic forecasts, where no change is expected on the Federal funds target rate of 0.00 - 0.25%.
“The main focus will be on QE3 and the Fed’s Chairman’s intentions to ‘taper’ which will be revealed in the accompanying press conference. We don’t expect any tapering to be announced tonight with purchases set to continue at the $85bn/month pace.” he adds.
Whilst the market will be looking for clues in Bernanke’s statement to give a concrete steer on the timing and scale of the taper, he may point to a substantial jobs market improvement as a precursor to any action. Our own view (close to broad expectations) is the 18 September Fed meeting is most likely, but with only a modest taper likely at that time and with purchases continuing into 2014. Bernanke will also have to answer questions relating to President Obama’s recent TV comments on Bernanke’s tenure at the Fed, which will provide another dimension to the press conference adding a further element of market uncertainty over the long-term Fed policy stance.
“The main focus will be on QE3 and the Fed’s Chairman’s intentions to ‘taper’ which will be revealed in the accompanying press conference. We don’t expect any tapering to be announced tonight with purchases set to continue at the $85bn/month pace.” he adds.
Whilst the market will be looking for clues in Bernanke’s statement to give a concrete steer on the timing and scale of the taper, he may point to a substantial jobs market improvement as a precursor to any action. Our own view (close to broad expectations) is the 18 September Fed meeting is most likely, but with only a modest taper likely at that time and with purchases continuing into 2014. Bernanke will also have to answer questions relating to President Obama’s recent TV comments on Bernanke’s tenure at the Fed, which will provide another dimension to the press conference adding a further element of market uncertainty over the long-term Fed policy stance.