23 Sep 2013
Flash: October tapering on the cards? - BBH
FXstreet.com (London) - In fact, research teams at BBH do not think that tapering is on the cards for October.
Key Quotes:
“We do not think an October tapering is very likely. It would give too much credence to high frequency, noisy data that is subject to statistically significant revisions. Moreover, even though the Fed reduced its GDP forecasts, we suspect it was not enough, and that the economy therefore under performed Fed expectations. Specifically, the economy expanded 1.8% in H1”.
“The market expects Q3 growth to be around 2%. To reach the Fed's central tendency, the economy has to grow nearly 3% in Q4. We also remain concerned that the Fed's forward guidance is compromised by the transition taking place at the Fed (not just Bernanke, but several other governors as well). The Fed that gives the forward guidance will not be the Fed that implements it”.
Key Quotes:
“We do not think an October tapering is very likely. It would give too much credence to high frequency, noisy data that is subject to statistically significant revisions. Moreover, even though the Fed reduced its GDP forecasts, we suspect it was not enough, and that the economy therefore under performed Fed expectations. Specifically, the economy expanded 1.8% in H1”.
“The market expects Q3 growth to be around 2%. To reach the Fed's central tendency, the economy has to grow nearly 3% in Q4. We also remain concerned that the Fed's forward guidance is compromised by the transition taking place at the Fed (not just Bernanke, but several other governors as well). The Fed that gives the forward guidance will not be the Fed that implements it”.