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Fed Statement: Highlights, Red Line (They’re Going With ‘Close To’)

FED KEEPS RATES UNCHANGED, SAYS INFLATION `MOVED CLOSE' TO 2%

Alright, so ahead of the Fed, we brought you a possibly useful guide that should help you interpret the statement or otherwise assist you in your probably fruitless efforts to read the tea leaves.

This was supposed to be a non-event (and maybe it will be) with the fireworks scheduled for June when a hike is almost fully priced. But thanks to the incoming inflation data, the move above 3% on 10Y yields, the flattening curve, and the suddenly resurgent dollar, an otherwise ho-hum statement has taken on a little more meaning.

Again, you can peruse the guide linked above for the backstory and the details, but what you’re looking for are changes to this (from the March statement):

On a 12-month basis, both overall inflation and inflation for items other than food and energy have continued to run below 2 percent. Market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.

Without further ado, here are the bullet points:

  • FED KEEPS RATES UNCHANGED, SAYS INFLATION `MOVED CLOSE’ TO 2%
  • FED SAYS RISKS TO ECONOMIC OUTLOOK APPEAR `ROUGHLY BALANCED
  • FED SEES INFLATION RUNNING NEAR `SYMMETRIC’ GOAL MEDIUM TERM

And here’s the redline:

redline

The knee-jerk was lower in the dollar and falling yields (i.e., a dovish interpretation):

Dollar

10Y

June odds holding.

  • FED FUNDS FUTURES SHOW ODDS OF JUNE RATE HIKE STEADY AROUND 95%

 

 

 

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4 comments on “Fed Statement: Highlights, Red Line (They’re Going With ‘Close To’)

  1. Pingback: Out Of The Frying Pan, Into The Fire: Full Week Ahead Preview · readly

  2. Pingback: Out Of The Frying Pan, Into The Fire: Full Week Ahead Preview - Financial Consultant

  3. Pingback: Fed Minutes: FOMC Says Inflation Overshoot ‘Could Be Helpful’ - Financial Consultant

  4. Pingback: Fed Minutes: FOMC Says Inflation Overshoot ‘Could Be Helpful’ | AlltopCash.com

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