Fed: Dovish surprise delivered - Westpac
|Sean Callow, analyst at Westpac, points out that the FOMC managed to deliver a dovish surprise and the median is now for 0 hikes in 2019 and just 1 by end-2021, from 3 in Dec.
Key Quotes
“Along with the “dots”, the Fed trimmed its 2019 and 2020 GDP forecasts to 2.1% and 1.9% (the White House budget projections are 3.2% and 3.0%) and announced that its balance sheet runoff (quantitative tightening) would conclude in Sep 2019, earlier than many expected.”
“The Fed’s switch to projection of a rates pause of at least 12 months should reverberate on the dollar and US yields for some time, weighing on DXY towards its January lows. But beyond that, most major currencies are not likely to be compelling alternatives.”
“We don’t expect pricing for Fed easing to gain too much traction.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.