September FOMC: The long and unwinding road - TDS
According to analysts at TDS, the Fed passed up an opportunity to show greater concern about low inflation or to signal a lower likelihood of rate hikes going forward.
Key Quotes
“We continue to expect the Fed to hike in December and twice in 2018.”
“The FOMC offset lower forecasted inflation this year and next with higher GDP growth and lower unemployment rate projections. The FOMC insisted that hurricane-distorted data will not impact the medium-term economic outlook.”
“Treasuries bear flattened sharply after the perceived hawkish FOMC meeting, leading us to take profit on our 5s30s curve flattener. We still expect 10y yields to rise to 2.5% by yearend, but don't see any near-term catalyst for a move.”
“The US dollar surged on a hawkish-sounding Fed, but we look to use the washout to establish fresh short exposure to the greenback, especially against EUR and CAD.”
Author
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.
