9 Dec 2014
Fed: Speculation on early rate hikes mount
FXStreet (Bali) - There is growing speculation that the Fed may be considering changing the language of its monetary policy statement after next week's FOMC, with market now anticipating that Yellen & Co. may drop the 'considerable time' phrase from the statement so that they can start preparing the market for rate hikes.
Latest from WSJ's Hilsenrath
"Federal Reserve officials are seriously considering an important shift in tone at their policy meeting next week: dropping an assurance that short-term interest rates will stay near zero for a “considerable time” as they look more confidently toward rate increases around the middle of next year."
"Senior officials have hinted lately that they’re looking at dropping this closely watched interest-rate signal, which many market participants take as a sign rates won’t go up for at least six months."
“It’s clearer that we’re closer to getting rid of that than we were a few months ago,” Fed Vice Chairman Stanley Fischer said in an interview with The Wall Street Journal last week. New York Fed President William Dudley has avoided using the “considerable time” phrase in recent speeches and instead said the Fed should be “patient” before raising rates."
"There will be a robust debate among officials on the issue at the Dec. 16-17 policy meeting, and a decision hasn’t been made. Atlanta Fed President Dennis Lockhart told reporters at an event Monday that he was “not in a rush to drop” the “considerable time” phrase. He wants to be more certain the economy is strong enough to bear rate increases before moving."
Latest from WSJ's Hilsenrath
"Federal Reserve officials are seriously considering an important shift in tone at their policy meeting next week: dropping an assurance that short-term interest rates will stay near zero for a “considerable time” as they look more confidently toward rate increases around the middle of next year."
"Senior officials have hinted lately that they’re looking at dropping this closely watched interest-rate signal, which many market participants take as a sign rates won’t go up for at least six months."
“It’s clearer that we’re closer to getting rid of that than we were a few months ago,” Fed Vice Chairman Stanley Fischer said in an interview with The Wall Street Journal last week. New York Fed President William Dudley has avoided using the “considerable time” phrase in recent speeches and instead said the Fed should be “patient” before raising rates."
"There will be a robust debate among officials on the issue at the Dec. 16-17 policy meeting, and a decision hasn’t been made. Atlanta Fed President Dennis Lockhart told reporters at an event Monday that he was “not in a rush to drop” the “considerable time” phrase. He wants to be more certain the economy is strong enough to bear rate increases before moving."