FOMC Minutes: 'More Gradualism And Fine Tuning': 3 Takes – CIBC

CIBC Research comments on today’s FOMC minutes from the May-3rd meeting. In particular, CIBC outlines the following 3 takes from the minutes:

1- The FOMC members put their weight on strong employment growth rather than weak GDP in Q1, a reason why the Fed statement continued to lean towards rate hikes ahead.

2- The weakening in the dollar and longer term yields were cited as an easing in financial conditions, and we view that as a factor tilting towards a rate hike in June. Indeed, a “few” members wanted to hike in May but didn’t dissent given the desire not to shock the market with an unanticipated hike

3- One new item: the FOMC discussed a plan to have the balance sheet reduction done through setting a new cap each quarter on how much of the balance sheet would roll off, with the rest of the maturities/coupons reinvested, and the initial cap set quite low

More gradualism and fine tuning, in other words, by a Fed that wants to carefully manage how the yield curve responds,” CIBC concludes.

Source: CIBC Economics – CIBC Capital Markets

The article is published by one of the foremost sources of Forex trading information. Link to the original article above.

from eFXNews

from Online Forex Trading Resource
View thesource article here


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s