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More FOMC responses incoming… hawkish cut theme solidifies – ForexLive, Forexlive.com

More FOMC responses incoming… hawkish cut theme solidifies – ForexLive, Forexlive.com


                                     

A few snippets from analyst responses to the Fed rate cut Wednesday:

BNZ, in brief, a handy summary if you need:

  • market has taken the statement as hawkish relative to expectations
  • Fed cut the Fed Funds target range by (bps to 1.) – 2.0%
  • and it cut the interest rate on excess reserves by 30 bps to 1.7% to help keep the effective Fed Funds rate within that range
  • dissents were in both directions
  • George and Rosengren arguing for no cut (again)
  • Bullard argued for a 50 bps cut
  • median “dot” is consistent with no further reduction rates this year or next
  • minimal changes to the Fed’s economic projections
  • policy outlook statement was unchanged from July
  • The only changes made to the statement were the acknowledgement that household spending had been rising at a strong pace while business investment and exports had weakened
  • press conference, Chair Powell … When asked whether the FOMC still had an easing bias, Powell said “we don’t” and argued that policy will be data dependent.

Nordea:

  • very few changes to their forecast for the US economy
  • Powell’s main message from the press conference. … Incoming data and the evolving risk picture will determine the need for any further adjustments to rates
  • We didn’t learn much from todays press release or press conference
  • The evolvement of the US economy and risk picture will determine how many more cuts will potentially follow

Scotia:

  • The overall suite of Fed communications delivered a hawkish rate cut and pushed back upon aggressive market pricing for further easing.
  • Fed cuts 25 bps with overall communications as we expected
  • guides that it may be done cutting before hiking in 2021
  • Even the most dovish FOMC members see only one more cut

A few snippets from analyst responses to the Fed rate cut Wednesday:

                

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