What to expect from FOMC today?
Last night I have read a statement from Bernanke that I found in my documents, the statement from March 27./2012. I can tell, after three years we have a completely different figures from US, much better. Especially with the labor market, where unemployment fell from 8.3% to 5.3%. Bernanke have said then, that we need to wait the better figures in the economy and that the interest rates will depend on that figures, after wich they will consider to hike the same, maybe in late 2014. The jobs market is not the only one which is important for a decision like this one, there is housing market as well, inflation forcast and much more figures, but… Here we are in the March 2015. and all we can hear from FED meetings is always the same, the magic word ‘patient’. What could we hear today, possibly the same!?
In the last 10 months the US dollar has strengthened abnormal in the market and that could be the biggest problem for which the Fed could still leave rates on hold, with the magic word ‘patient’ in the main role. Further strengthening of the US dollar would only harm the recovery, the exporters already have a problem. On the other side, whether is eventualy droping the word ‘patient’ from Yellen statement included in the US dollar strenght? It could be. That’s why I am thinking about this. Only concrete and specific actions in tightening monetary policy could give the strong boost to US dollar, everything else could have a minor impact in the market. I expect from Yellen to stay on course until the next meeting in June. Dovish statement could help other curencies to recover, especially the euro. Let’s see!?
18:00 h (GMT) – FED Interest rate Decision, (previous 0,25%), FED’s Monetary Policy Statement.
18:30 h (GMT) – FED’s Monetary Policy Statement and Press Conference.