Fed may be more cautious, but unlikely to change course - AmpGFX
|It will be more difficult for the Fed and economists to get a clear picture of the underlying trends in the economy for several months post Harvey, according to Greg Gibbs, Analyst at Amplifying Global FX Capital Pty Ltd.
Key Quotes
“This might to some extent make the Fed approach further policy tightening more cautiously than they would otherwise. It would risk undermining confidence if the Fed were to proceed with policy tightening in the disruption phase.”
“However, The Fed has no immediate plans to raise rates until maybe December. It would seem unlikely that Harvey will be concerning enough to prevent the Fed kicking of its first tentative steps towards Quantitative Tightening (QT) at its September meeting. By the middle of Q4, the market may even begin to draw confidence from the rebuilding phase.”
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