FOMC: Toying with the unknow – ANZ

By FXStreet FXStreet (Guatemala) – 2015 has been a year of precedents – Trade liberalisation received a boost via the signing of the Trans-Pacific Partnership, financial market liberalisation continued in China, and the Paris Agreement was signed (this weekend) binding rich and poor governments into reducing greenhouse gas emissions.

Key Quotes:

“In addition there is the Fed. And with the market attaching 74% odds, the first Fed hike in a decade this week looks a done deal for all intents and purposes, with the focus on the content of Thursday’s policy assessment and the published interest rate “dot plots” of Fed members. Both are expected to reiterate the gradualist and data dependent message that the Fed has been careful to cultivate.

The hope is that this will result in little disruption for markets, wider asset prices and the economy, both in the US and abroad. Measures of market volatility are down from September’s spike and plummeting oil prices do not suggest the imminent return of higher inflation that would give bond markets the jitters. The reality, however, is that we are toying with the unknown given that the Fed has not hiked rates in close to a decade.

A degree of nervousness is …read more

Source:: FX Street