FOMC: We think September – SG

FXStreet (Guatemala) – Kit Juckes, macro strategist at Societe Generale noted the FOMC statement today and the implications for a Fed hike this year.

Key Quotes:

“The side-by-sides are attached. The bottom line is that the FOMC is closer to tightening – something that was always true unless they never tighten – but it depends on ‘some’ labour market tightening and confidence about inflation.

If any major US economic forecasting group changes its mind about the timing of the first hike on this I’ll be amazed. We think September.

EU/US 2yr spreads have moved 2bp. My baby model says that reduces fair value by 24 ticks, less than a quarter of a percent. Wow. The market on that basis has overreacted!

Still, we get a message that if the US data is OK they’ll go this year, perhaps earlier than expected. Now we wait for GDP and the bond/equity/commodity reaction.

I’m still a dollar bull, but that was predictable. There’s nothing here to challenge that stance even if there’s only very measly support for it.”

Kit Juckes, macro strategist at Societe Generale noted the FOMC statement today and the implications for a Fed hike this year.

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