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FOMC: Hawkish forecasts - AmpGFX

The FOMC minutes are released on 11 April next week and the FOMC market projections moved towards a more hawkish position on their economic and rates outlook, explains Greg Gibbs, Analyst at Amplifying Global FX Capital. 

Key Quotes

“The market was quickly distracting by tariff announcements after the release of the FOMC decisions on 21 March and paid these hawkish elements little attention.”

“The risk is that the minutes give these hawkish elements a second chance to influence the market, particularly if matched by a higher CPI releases earlier on the same day.”

“A traditional reaction to higher inflation and a more hawkish tone of FOMC minutes should be higher US bond yields and a stronger USD.  And we see this as a significant risk.  However, with the potential for a fallout to jittery asset markets, it is harder to be sure how the FX and bond markets will react. We may start to see weaker EM currencies and a stronger JPY if fears of faster Fed rate hikes plays poorly for global equity markets.”

Author

Sandeep Kanihama

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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