FOMC: Door open for March rate hike – SocGen

By FXStreet FXStreet (Delhi) – Kit Juckes, Research Analyst at Societe Generale, notes that the FOMC acknowledged the threat posed to the outlook for US labour markets and inflation from global and financial developments, but nevertheless left the door ajar for a March rate hike.

Key Quotes

“This would have been a dovish policy statement if market pricing of the outlook for rates hadn’t already moved significantly since the December FOMC meeting, but as it is, it will lead to heightened uncertainty about the March meeting and equity markets have judged it hawkish enough to sell-off sharply.

There wasn’t really enough in the statement for anyone to change their forecasts of the Fed outlook in 2016 and indeed, our US economists still expect three hikes this year, though we realise that whether they act in march or not is a ‘coin toss’ as Aneta Markowska puts it.”
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Source:: FX Street