FXstreet.com (Barcelona) - Last night the Fed announced another round of asset purchases, targeted exclusively at the agency MBS market. The fed funds rate guidance was also extended to mid-2015 and Operation Twist will continue as before. Although MBS purchases will be conducted at the moderate pace of USD $40B per month, the program is open-ended and so has the potential to become very large.
As explained by Chris Walker a Research Analyst at UBS, “The intention is to persist until the outlook for the labor market improves. Consequently, the dollar's sensitivity to employment-related data releases is likely to increase significantly in future.”
Fed members revised their growth and inflation outlook upward in 2013, after factoring in the effects of this latest stimulus. Forecasts for unemployment rate, however, remained hardly changed at 7.6% to 7.9%.
As explained by Chris Walker a Research Analyst at UBS, “The intention is to persist until the outlook for the labor market improves. Consequently, the dollar's sensitivity to employment-related data releases is likely to increase significantly in future.”
Fed members revised their growth and inflation outlook upward in 2013, after factoring in the effects of this latest stimulus. Forecasts for unemployment rate, however, remained hardly changed at 7.6% to 7.9%.
