24 Jul 2013
Flash: What are the timetables for Fed tapering? – Investec
FXstreet.com (New York) - Recent polls put the broad consensus at a very slow Fed taper down in purchases towards an all-out halt in mid-14, notes Corporate Treasury Lee McDarby at Investec.
Key quotes
“We see the Fed’s exit on rates and QE3 to be very clearly distinct from one another with little chance of the Fed beginning its rates ‘normalization’ before early 2015, possibly later.”
Even then an increase is likely to be very gradual indeed. “A tapering in QE3 is, in our view, likely to be announced as soon as September (18 Sept FOMC); a view shared by the latest poll data too.”
“We share the view that the taper will be slow initially, though we would warn that the pace of pull-back could pick-up in early-2014 as US recovery momentum builds, whilst the jobs recovery remains steady.”
Key quotes
“We see the Fed’s exit on rates and QE3 to be very clearly distinct from one another with little chance of the Fed beginning its rates ‘normalization’ before early 2015, possibly later.”
Even then an increase is likely to be very gradual indeed. “A tapering in QE3 is, in our view, likely to be announced as soon as September (18 Sept FOMC); a view shared by the latest poll data too.”
“We share the view that the taper will be slow initially, though we would warn that the pace of pull-back could pick-up in early-2014 as US recovery momentum builds, whilst the jobs recovery remains steady.”