FOMC remains committed to dovish policy – Capital Economics

"Although the Summary of Economic Projections (SEP) released after the mid-March FOMC meeting showed some disagreement among Fed officials on how long to leave the fed funds rate at near zero, the minutes offered few hints of any serious tensions," notes Paul Ashworth, Chief US Economist at Capital Economics.

Key quotes

"The minutes were, on the whole, as dovish as expected, noting that labour market conditions for "those in the most disadvantaged communities were viewed as lagging" and, as a result, "the economy was far from achieving the FOMC's broad-based and inclusive goal of maximum employment"."

"Officials were unworried by the sharp rise in Treasury yields, rationalising that "as reflecting the improved economic outlook, some firming in inflation expectations, and expectations for increased Treasury debt issuance". The minutes do warn that "disorderly conditions" in the Treasury market could derail the recovery, but leave it at that without quantifying what that means."

"All things considered, there is little here to change our view that the Fed will wait until late 2023 before beginning to raise interest rates."

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.

Feed news

Get Weekly Crypto trade ideas!  
Empower yourself with the best market insights

Join FXStreet Premium!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD holds above 1.20 on broad dollar weakness

EUR/USD is holding onto gains above 1.20, hitting the highest since March as the greenback falls despite a slide in stocks and an uptick in US yields. Optimism about Europe's vaccination campaign is helping the euro.


GBP/USD soars toward 1.40 on vaccine optimism, greenback retreat

GBP/USD is on the rise, surging toward 1.40 as the greenback is on the back foot, despite an advance in Treausry yields. Britain's successful vaccination campaign and an optimistic market mood also support cable.


XAU/USD pares early gains, holds above $1,770

The XAU/USD pair managed to build on last week's gains and touched its highest level since late February at $1,790 on Monday. However, the pair failed to preserve its bullish momentum in the second half of the day and reversed its direction.

Gold News

DOGE base targets at least 30% upside

Dogecoin price declined almost 50% from the April 16 high to the April 17 low, reminding speculators that DOGE did have two sides. Since the price low, the altcoin rallied close to the all-time high at $0.4532 by April 19. 

Read more

European Central Bank Preview: Five reasons for Lagarde to lift the euro

"Delayed, not derailed" – that has been the message coming from Christine Lagarde, President of the European Central Bank, and she will likely repeat it. However, while the Frankfurt-based institution announced it would bring forward some of its support in its March meeting, the view could be significantly different this time.

Read more