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12 Dec 2013
Flash: FOMC preview – TDS
FXstreet.com (London) - Strategists at TD Securities said the Fed has all it needs to justify a tapering in December, but will defer all major policy changes to the January meeting.
Key Quotes:
An uneventful FOMC decision next week is shaping up as incrementally more dovish than many, though not all, now expect.
"Fed confidence to proceed with taper is high and rising. Term premiums have decoupled from rate hike expectations as forward guidance begins to resonate, and economic momentum is stronger than expected at a time when the balance of risks is finally tilting their way".
"The debate among policymakers is no longer about tapering. It is about constructing viable forward guidance. Balance sheet management is likely to figure prominently in that effort".
Key Quotes:
An uneventful FOMC decision next week is shaping up as incrementally more dovish than many, though not all, now expect.
"Fed confidence to proceed with taper is high and rising. Term premiums have decoupled from rate hike expectations as forward guidance begins to resonate, and economic momentum is stronger than expected at a time when the balance of risks is finally tilting their way".
"The debate among policymakers is no longer about tapering. It is about constructing viable forward guidance. Balance sheet management is likely to figure prominently in that effort".