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24 Apr 2013
Forex Flash: The Federal Reserve meets in a week's time with QE exit talk on lips - BBH
FXstreet.com (Barcelona) - Brown Brothers Harriman analysts note that the Fed meets in a weeks time and the minutes of recent meetings show that some members are still talking about a gradual exit from QE later this year.
They have consistently argued that the Troika of Bernanke, Yellen and Dudley are the key and that they are clearly arguing that it is too early exit. Additionally, a recent Bloomberg survey of 21 primary dealers found a majority (14) do not expect the Fed to taper its buying until Q1 14; (12) do not expect purchases to cease until mid-2014 or later, and (15) do not expect the first hike in the Fed funds rate before mid-2015. They write, “Of note, one investment house does not see the first hike before the beginning of 2016. Another does not envision any tapering off for two years and four expect the purchases to continue into 2015. At the other end of the spectrum, one bank expects the tapering off to begin in Q3 and two primary dealers expect the Fed to end QE at the end of this year.”
They have consistently argued that the Troika of Bernanke, Yellen and Dudley are the key and that they are clearly arguing that it is too early exit. Additionally, a recent Bloomberg survey of 21 primary dealers found a majority (14) do not expect the Fed to taper its buying until Q1 14; (12) do not expect purchases to cease until mid-2014 or later, and (15) do not expect the first hike in the Fed funds rate before mid-2015. They write, “Of note, one investment house does not see the first hike before the beginning of 2016. Another does not envision any tapering off for two years and four expect the purchases to continue into 2015. At the other end of the spectrum, one bank expects the tapering off to begin in Q3 and two primary dealers expect the Fed to end QE at the end of this year.”