1 Jul 2013
Flash: Fed to continue dominating Calendar in July - DBS Group
DBS Group analysts believe that the US Federal reserve will continue to dominate the calendar in July.
They begin by noting that this week, New York Fed President William Dudley and Fed Governor Jerome Powell, the two officials who calmed markets last week, will be speaking tomorrow. They add that the Fed will be holding its annual symposium at Jackson Hole on July 12-13, but Fed Chairman Ben Bernanke will not be attending. They write, “Bernanke is, however, scheduled to deliver his semi-annual congressional testimonies on monetary policy on July 17-18. As for data, they note that Friday’s NFP jobs data will be the most closely watched to set the tone for the month.
They see that the Fed is in damage control mode and has been guiding expectations on its intentions to taper asset purchases later in the year. However, the Fed does not want markets to bring forward rate hike expectations into 2014. They write, “As far as the US economy is concerned, the recovery is strong enough to make QE3 less open-ended, but not sustainable enough to render it close-ended. Why else would the Fed have inserted a new line “to increase or reduce the pace of its purchases” into its FOMC statement on May 1?” Nonetheless, they finish by adding that Fed Governor Jeremy Stein suggested last Friday that a decision on asset purchases may come at the FOMC meeting on September 18.
They begin by noting that this week, New York Fed President William Dudley and Fed Governor Jerome Powell, the two officials who calmed markets last week, will be speaking tomorrow. They add that the Fed will be holding its annual symposium at Jackson Hole on July 12-13, but Fed Chairman Ben Bernanke will not be attending. They write, “Bernanke is, however, scheduled to deliver his semi-annual congressional testimonies on monetary policy on July 17-18. As for data, they note that Friday’s NFP jobs data will be the most closely watched to set the tone for the month.
They see that the Fed is in damage control mode and has been guiding expectations on its intentions to taper asset purchases later in the year. However, the Fed does not want markets to bring forward rate hike expectations into 2014. They write, “As far as the US economy is concerned, the recovery is strong enough to make QE3 less open-ended, but not sustainable enough to render it close-ended. Why else would the Fed have inserted a new line “to increase or reduce the pace of its purchases” into its FOMC statement on May 1?” Nonetheless, they finish by adding that Fed Governor Jeremy Stein suggested last Friday that a decision on asset purchases may come at the FOMC meeting on September 18.