28 Apr 2016
FOMC still in position to consider a June hike if conditions warrant - Wells Fargo
According to analysts from Wells Fargo, the Federal Reserve gave a message that the economic situation warrants gradual rate hikes.
Key Quotes:
“While still not introducing a balance of risks assessment, today’s updated policy statement keeps the Fed in position to consider a June rate hike if conditions warrant.”
“The key focus of the statement was the updated treatment of risks to the outlook for economic activity and inflation. The key sentence from the March statement on “global economic and financial developments continue to pose risks” was removed. Instead, it was changed to the Fed will be “monitoring” the aforementioned, with the addition of inflation indicators.”
“In our opinion, the updated policy statement remains constructive to our view that U.S. economic conditions will continue to evolve in a direction that places the Fed in a position to consider a near-term rate hike, if conditions warrant. Activity abroad, financial developments and inflation appear to be the key sign posts for whether such a move can occur. Although we did not get the outright assessment of the balance of risk statement that will likely be required to lift interest rates, the statement did not remove the possibility of a June hike. Data performance over the next two months will tell us whether that possibility exists.”
Key Quotes:
“While still not introducing a balance of risks assessment, today’s updated policy statement keeps the Fed in position to consider a June rate hike if conditions warrant.”
“The key focus of the statement was the updated treatment of risks to the outlook for economic activity and inflation. The key sentence from the March statement on “global economic and financial developments continue to pose risks” was removed. Instead, it was changed to the Fed will be “monitoring” the aforementioned, with the addition of inflation indicators.”
“In our opinion, the updated policy statement remains constructive to our view that U.S. economic conditions will continue to evolve in a direction that places the Fed in a position to consider a near-term rate hike, if conditions warrant. Activity abroad, financial developments and inflation appear to be the key sign posts for whether such a move can occur. Although we did not get the outright assessment of the balance of risk statement that will likely be required to lift interest rates, the statement did not remove the possibility of a June hike. Data performance over the next two months will tell us whether that possibility exists.”