26 Jan 2015
FOMC in focus this week - Rabobank
FXStreet (Guatemala) - Analysts at Rabobank explained that at the last meeting in 2014, the FOMC updated its forward guidance regarding the first rate hike.
Key Quotes:
"The Committee judges that it can be ‘patient’ in beginning to normalize the stance of monetary policy. However, the FOMC stressed that this alteration is consistent with the previous statement that it likely will be appropriate to maintain the 0.00-0.25% target zone for a ‘considerable time’ following the end of QE3 in October."
"At the post-meeting press conference Chair Janet Yellen defined ‘patient’ as meaning no rate hike for at least the next couple of meetings. She also confirmed that a number of participants thought that it would be appropriate to start hiking by the middle of 2015."
"However, the economic data are asking for more patience."
"While the Employment Report for December confirmed that the US economy is growing robustly, generating over 200K new jobs per month, it also revealed that wage growth has decelerated. Average hourly earnings (year-on-year) slowed down to 1.7% from 1.9% (revised downward from 2.1%) in November."
"In fact, after the revisions there is now a clear slide in average hourly earnings from 2.1% in August. The Beige Book for January confirmed that significant wage pressures are largely limited to workers with specialized technical skills."
Key Quotes:
"The Committee judges that it can be ‘patient’ in beginning to normalize the stance of monetary policy. However, the FOMC stressed that this alteration is consistent with the previous statement that it likely will be appropriate to maintain the 0.00-0.25% target zone for a ‘considerable time’ following the end of QE3 in October."
"At the post-meeting press conference Chair Janet Yellen defined ‘patient’ as meaning no rate hike for at least the next couple of meetings. She also confirmed that a number of participants thought that it would be appropriate to start hiking by the middle of 2015."
"However, the economic data are asking for more patience."
"While the Employment Report for December confirmed that the US economy is growing robustly, generating over 200K new jobs per month, it also revealed that wage growth has decelerated. Average hourly earnings (year-on-year) slowed down to 1.7% from 1.9% (revised downward from 2.1%) in November."
"In fact, after the revisions there is now a clear slide in average hourly earnings from 2.1% in August. The Beige Book for January confirmed that significant wage pressures are largely limited to workers with specialized technical skills."