29 Apr 2015
Goldman Sachs: September remains likely for a rate hike – eFXnews
FXStreet (Barcelona) - Previewing the FOMC meeting, the Research Team at Goldman Sachs, believes that although September is preferred for a Fed rate hike, December remains a close call too, as noted by eFXnews.
Key Quotes
“With respect to the April statement, we do not expect a substantial change in the language. The reference to "strong job gains" may be moderated due to the disappointing March employment report and the comment that "inflation has declined further" could be adjusted as inflation trends have not changed significantly.”
“However, communication on the expected path of policy rates and forward guidance will most likely remain unchanged, apart from removing the reference to the April meeting.”
“We also expect to see no dissents, even though Richmond Fed President Lacker has indicated he would like the Committee to be hiking immediately.”
“While our central forecast of actual policy remains liftoff at the September 16-17 FOMC meeting, this remains a close call vs. December....This means that we see data, not the Fed, as the next key catalyst for the Dollar to resume its march higher, as it becomes clear that weak Q1 activity was once again an aberration.”
“Surprises could come in the form of language describing recent data weakness as “temporary”, which would be seen as hawkish by the market. Language ruling out June for 'lift-off' would be seen as a dovish surprise.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“With respect to the April statement, we do not expect a substantial change in the language. The reference to "strong job gains" may be moderated due to the disappointing March employment report and the comment that "inflation has declined further" could be adjusted as inflation trends have not changed significantly.”
“However, communication on the expected path of policy rates and forward guidance will most likely remain unchanged, apart from removing the reference to the April meeting.”
“We also expect to see no dissents, even though Richmond Fed President Lacker has indicated he would like the Committee to be hiking immediately.”
“While our central forecast of actual policy remains liftoff at the September 16-17 FOMC meeting, this remains a close call vs. December....This means that we see data, not the Fed, as the next key catalyst for the Dollar to resume its march higher, as it becomes clear that weak Q1 activity was once again an aberration.”
“Surprises could come in the form of language describing recent data weakness as “temporary”, which would be seen as hawkish by the market. Language ruling out June for 'lift-off' would be seen as a dovish surprise.”
This content has been provided under specific arrangement with eFXnews.