10 Dec 2013
Flash: Fed talk - tapering ahead? – Rabobank
FXstreet.com (London) - Strategists at Rabobank noted that yesterday was light on data but heavy on Fed speakers – from whom the message was that QE tapering can still be expected ahead, and maybe even in December.
Key Quotes:
“Lacker stated that he expects tapering to be up for discussion at the FOMC meeting next week (but also that frequent changes to the pace of bond buying - and communicating that process - were problematic); Bullard added that the tapering process was data dependent, and as the labour market data had improved the odds of such a move being made in December had also firmed; and Fisher rejoined that there was “room to dial back” QE in December, and that the costs of the scheme far outweighed its benefits”.
“Nonetheless, Rabobank is still sticking with its view that the Fed will opt to wait and see if labour market gains are sustained before tapering, with a March 2014 start date still most likely”.
Key Quotes:
“Lacker stated that he expects tapering to be up for discussion at the FOMC meeting next week (but also that frequent changes to the pace of bond buying - and communicating that process - were problematic); Bullard added that the tapering process was data dependent, and as the labour market data had improved the odds of such a move being made in December had also firmed; and Fisher rejoined that there was “room to dial back” QE in December, and that the costs of the scheme far outweighed its benefits”.
“Nonetheless, Rabobank is still sticking with its view that the Fed will opt to wait and see if labour market gains are sustained before tapering, with a March 2014 start date still most likely”.