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24 Feb 2015
Credit Agricole: Yellen likely to deflect questions on Fed’s forward guidance – eFXnews
FXStreet (Barcelona) - The eFXnews Team shares Credit Agricole’s view regarding the expectations from today’s Yellen’s testimony, with CA commenting that the Fed Chair is likely to deflect any questions relation to ‘patience’.
Key Quotes
“We believe that the assessment of economic activity will be relatively upbeat.”
“We look for Chair Yellen’s comments to suggest that the FOMC believes it will soon approach employment conditions that are consistent with its employment mandate.”
“In assessing the impact of global factors on the US economy, it will be interesting to see if she focuses on positive international developments, such as increased ECB accommodation and lower oil prices or negative developments such as softer global growth and a stronger dollar.”
“On the inflation front, Chair Yellen will likely note that price inflation has moved further away from the Fed’s 2% target, largely reflecting the declines in energy prices.”
“We expect her to underscore that inflation expectations remain relatively well anchored and hence the impact of lower energy prices is likely to be transitory but needs to be monitored carefully.”
“Ms. Yellen will likely note that the Fed focuses on the medium-term outlook for core inflation as a guide to policy.”
“Chair Yellen is expected to stress the data dependency of the monetary policy outlook, while indicating that most FOMC members look to begin normalizing rates this year.”
“The Chair will no doubt be asked about “patience” and forward guidance. We suspect that she will deflect the question, by saying that the FOMC will try to indicate as clearly as possible its current thinking conditioned on incoming data.”
Key Quotes
“We believe that the assessment of economic activity will be relatively upbeat.”
“We look for Chair Yellen’s comments to suggest that the FOMC believes it will soon approach employment conditions that are consistent with its employment mandate.”
“In assessing the impact of global factors on the US economy, it will be interesting to see if she focuses on positive international developments, such as increased ECB accommodation and lower oil prices or negative developments such as softer global growth and a stronger dollar.”
“On the inflation front, Chair Yellen will likely note that price inflation has moved further away from the Fed’s 2% target, largely reflecting the declines in energy prices.”
“We expect her to underscore that inflation expectations remain relatively well anchored and hence the impact of lower energy prices is likely to be transitory but needs to be monitored carefully.”
“Ms. Yellen will likely note that the Fed focuses on the medium-term outlook for core inflation as a guide to policy.”
“Chair Yellen is expected to stress the data dependency of the monetary policy outlook, while indicating that most FOMC members look to begin normalizing rates this year.”
“The Chair will no doubt be asked about “patience” and forward guidance. We suspect that she will deflect the question, by saying that the FOMC will try to indicate as clearly as possible its current thinking conditioned on incoming data.”