Fed Yellen’s Testimony: Uncertainty About Inflation A Signal Of Slower Pace Of Further Hikes – ABN AMRO

Fed Chair Janet Yellen said they are monitoring inflation closely[1], but also expressed optimism about the economic situation. What does it mean for the Fed? Here is the view by ABN AMRO:

Here is their view, courtesy of eFXnews:

ABN AMRO Research comments on Fed Yellen’s testimony before the Congress.

“Although the Fed seemed to stick to its base case that diminishing slack would foster ‘a stronger pace of wage and price increases’, Ms. Yellen was a little more cautious about this prospect. She noted that there was ‘uncertainty about when–and how much–inflation will respond to tightening resource utilization’.

The Fed’s concern about inflation suggests that there were downside risks to its forward guidance that ‘gradual increases in the federal funds rate over time’ will be warranted. The FOMC is currently projecting four increases in its key policy rate between now and the end of 2018. Her remarks signal the risk that the pace could be slower,” ABN AMRO adds.

Our own view is that there will be three increases in interest rates, with the risks skewed towards even less because of downside risks to the inflation outlook,” ABN AMRO adds.

For lots more FX trades from major banks, sign up to eFXplus[2]

By signing up to eFXplus via the link above, you are directly supporting Forex Crunch.

Get the 5 most predictable currency pairs[3]

from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/KMIE3sDsRUo/

from Online Forex Trading Resource
View thesource article here


Leave a Reply

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

WordPress.com Logo

You are commenting using your WordPress.com 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