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18 Jun 2013
Flash: Fed tapering rages on – Deutsche Bank
FXstreet.com (New York) - There has been no shortage of Fed-related headlines in the lead up to Wednesday's FOMC.
Yesterday, the FT published a commentary saying that Bernanke will likely use Wednesday's post-FOMC press conference to signal that the Fed is close to tapering asset purchases. The article also wrote that Bernanke will balance his message by saying subsequent tapering moves will depend on the path of the economy and in no way brings forward the timing of a rate rise.
The S&P500 fell almost 1%, and the USD index hit an intraday high of 80.9 (or +0.26%), in the hour after the article hit the newswires. However in an interesting turn of events, the FT reporter who wrote the article (US economy reporter Robin Harding) subsequently tweeted that "The Fed does not leak anything to any journalist to steer markets - especially during blackout" and that he has "been in the September taper camp for a while and I'd stick with that". According to the Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “”e suspect that this week Bernanke will continue to say tapering could happen this year but will be data dependent and that we are still a long way off from removing the very easy policy stance the Fed has in place.”
Yesterday, the FT published a commentary saying that Bernanke will likely use Wednesday's post-FOMC press conference to signal that the Fed is close to tapering asset purchases. The article also wrote that Bernanke will balance his message by saying subsequent tapering moves will depend on the path of the economy and in no way brings forward the timing of a rate rise.
The S&P500 fell almost 1%, and the USD index hit an intraday high of 80.9 (or +0.26%), in the hour after the article hit the newswires. However in an interesting turn of events, the FT reporter who wrote the article (US economy reporter Robin Harding) subsequently tweeted that "The Fed does not leak anything to any journalist to steer markets - especially during blackout" and that he has "been in the September taper camp for a while and I'd stick with that". According to the Macro Strategy Analysts J. Reid and C. Tan at Deutsche Bank, “”e suspect that this week Bernanke will continue to say tapering could happen this year but will be data dependent and that we are still a long way off from removing the very easy policy stance the Fed has in place.”