Some doves are for turning… but not Bullard - ABN AMRO
|"St Louis Fed President Bullard continued to strike a relatively dovish tone in remarks made today," points out ABN Amro Senior Economist Bill Diviney.
Key quotes
"While acknowledging the present strength in the US economy, he repeated his view that ‘we are close to neutral’ and that ‘we don’t have to be projecting planned rate hikes at this point’, but preferred instead a more data-dependent approach from here on. With that said, he sounded comforted by the recent re-steepening in the yield curve, saying ‘that’s probably welcome from my perspective’ and that a healthy level would be closer to 70bp (as of Friday’s market close, the 2s10s are c.34bp)."
"These comments come in contrast to those of Atlanta Fed president Bostic – a more moderate dove – who last Friday signalled a more meaningful shift in his policy views. Most strikingly, he said ‘the central question in my mind is whether the apparent strength in GDP and job growth is a signal that I have materially underestimated the underlying momentum of aggregate demand,’ and that if that were the case, ‘the potential for overheating would require a higher path for rates than what I had been thinking’. Indeed, earlier in the year, Bostic – who is a voter on the FOMC this year, but not next – said he expected 2-3 rate hikes in 2018. By December, he is very likely to be voting in favour of a fourth."
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.