25 Feb 2015
Yellen’s recipe for more volatility ahead, remove ‘patient’ but remain patient – BAML
FXStreet (Barcelona) - The BofA-Merrill Lynch Team shares their view on yesterday’s Yellen’s testimony.
Key Quotes
“In our view, the upshot of testimony by Yellen is that there are rising odds of a scenario in which the Fed stops signaling a “patient” approach in March yet finds itself remaining patient in June and not hiking.”
“That may be a recipe for more volatility in markets, but price action suggests it might not be nearly as disruptive as the taper tantrum.”
“We believe Yellen’s finely balanced discussion appears to have assuaged the markets until the next big Fed event: the 17-18 March FOMC meeting, with updated forecasts and a press conference.”
Key Quotes
“In our view, the upshot of testimony by Yellen is that there are rising odds of a scenario in which the Fed stops signaling a “patient” approach in March yet finds itself remaining patient in June and not hiking.”
“That may be a recipe for more volatility in markets, but price action suggests it might not be nearly as disruptive as the taper tantrum.”
“We believe Yellen’s finely balanced discussion appears to have assuaged the markets until the next big Fed event: the 17-18 March FOMC meeting, with updated forecasts and a press conference.”