US: FedWatch
0
0
FOMC Minutes June 27th/28th Meeting
Fri, Jul 20 2007, 07:28 GMT
by Rae Anne Dodds
- Risks to economic growth “more balanced”
- Inflation level is “favorable” but moderation trend is not yet convincing
- Fed funds target will continue to be 5.25%
“More balanced” risks to growth while upside risks to inflation persist
According to the FOMC minutes, “Risks to growth were more balanced than at the time of the May meeting.” The balance primarily stems from the improvement in business spending data that was available between the May and June meeting. Moreover, members anticipate stronger foreign demand to further contribute to the firming of business spending. Despite the overall improvement in the risk assessment, the housing sector remains a “key source of uncertainty.” During May’s meeting, member’s expected the housing “to weigh heavily on economic activity through most of the year.” Members now expect the drag of housing activity to “contract for several more quarters” suggesting this downside risk will extend into 2008.
While there were areas where the committee implicitly relaxed previous upside risks, the inflation outlook remained unchanged. The possibility of a lower NAIRU explaining the absence of wage pressures within the tight labor market and an expected 2006 employment downward revision causing historic productivity measures to be revised upward both soften these upside risks. However, external influences from the weakening dollar, commodity price pressures, and the increasing global demand were retained from the May meeting. These upside pressures compounded with the general high level of utilization (both domestically and abroad) are the reason for the Fed’s hesitancy in accepting the recent improvement in core inflation measures as a moderating trend.
Extended pause of monetary policy
In our opinion, with recent core inflation moderation and an increased likelihood that output will grow near trend levels FOMC is likely to continue their “wait and see” strategy. While the minutes signaled some concerns on inflation expectations, recent movements have been easily within the historical norms. Thus, we believe the federal funds target will remain at 5.25% for an extended period given the 2008 forecasts for both output and inflation along with well-anchored inflation expectations. Given the increased stability of the outlook for growth and continuing uncertainties surrounding inflation, FOMC will focus mostly on ensuring that inflationary pressures remain contained.
Published on Fri, Jul 20 2007, 07:29 GMT
Archive
- Target rates and monetary easing levels are maintained
Published On Thu, Jun 25 2009, 14:25 GMT - FOMC Minutes April 28-29, 2009
Published On Thu, May 21 2009, 07:38 GMT - The FOMC acknowledged signs of stabilization
Published On Thu, Apr 30 2009, 08:19 GMT - Fed kept its target rate unaltered and intensifies quantitative easing
Published On Thu, Mar 19 2009, 08:50 GMT - FOMC Minutes January 27-28, 2009
Published On Thu, Feb 19 2009, 10:36 GMT
BBVA Bancomer
| Av. Universidad 1200 Col. Xoco México 03339 D.F.
http://www.bancomer.com/economica | e.economicos@bbva.bancomer.com
Legal disclaimer and risk disclosure
This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) Research Department on behalf of itself and its affiliated companies (each a BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. The information, opinions, estimates and forecasts contained herein refer to that specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.Interested in forex trading? forex brokerage firms!
GET CASH BACK FOR YOUR TRADES! Learn more about the Pip Rebate Program
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
©2009 "FXstreet.com. The Forex Market" All Rights Reserved.