23 Aug 2013
Flash: August Nonfarm payrolls the key factor to initiate tapering – Deutsche Bank
FXstreet.com (New York) - Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank analyze the key factors that remain, leading up to the September Fed meeting.
Key quotes
“The FOMC also discussed the potential for a fixed-rate, full-allotment overnight reverse repurchase agreement facility which could be used to eventually adjust financial system liquidity at a later stage.”
“There was some consolation for the doves given there was some discussion about the Fed’s forward guidance thresholds with some members willing to contemplate lowering the unemployment threshold if further accommodation were necessary.”
“Overall we economists think that the minutes signal that policymakers are willing to consider a taper in the near term, but they need decent data—in particular employment data—to support their decision. On that note, August payrolls will be the determining factor.”
Key quotes
“The FOMC also discussed the potential for a fixed-rate, full-allotment overnight reverse repurchase agreement facility which could be used to eventually adjust financial system liquidity at a later stage.”
“There was some consolation for the doves given there was some discussion about the Fed’s forward guidance thresholds with some members willing to contemplate lowering the unemployment threshold if further accommodation were necessary.”
“Overall we economists think that the minutes signal that policymakers are willing to consider a taper in the near term, but they need decent data—in particular employment data—to support their decision. On that note, August payrolls will be the determining factor.”