From the FXWW Chatroom: – Scotiabank: The FOMC consensus walked on the slightly more dovish side of neutral compared to market concerns going into the statement. There are significant language changes that at a minimum provide no clue that the consensus is thinking of adding to the ‘dot plot’ guidance for the pace of rate hikes.
– TD: We would not take a strong dovish signal from the changes to the
statement, however: the FOMC continues to expect a “further gradual” rate hikes,
and also does not foresee a significant overshooting of the inflation target.
Were the latter to arise, we would expect a more explicit hawkish shift in the
Fed’s language. We continue to see the Fed on track for another 25bp rate hike
in June, and three in total for this year unless inflation surprises materially
(in both size and duration) to the upside.
statement, however: the FOMC continues to expect a “further gradual” rate hikes,
and also does not foresee a significant overshooting of the inflation target.
Were the latter to arise, we would expect a more explicit hawkish shift in the
Fed’s language. We continue to see the Fed on track for another 25bp rate hike
in June, and three in total for this year unless inflation surprises materially
(in both size and duration) to the upside.
– BMO: This is another step closer to a June rate hike, and three total moves by
year end (which we expect will get displayed in next month’s “dot plot” median).
year end (which we expect will get displayed in next month’s “dot plot” median).
– RBC: If there was 1 thing that the bears will latch on to it is the removal of
the language that “the economic outlook has strengthened in recent months”. This
is not significant. It was appropriate to insert this language at the Mar confab
since that is when the Committee made some wholesale changes to their summary of
econ projections. The Fed was much gentler with inflation tweaks than they could
have been. This is part & parcel of not wanting the mkt to read too much into
changes at a non-press conference meeting.
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