What analysts at Goldman Sachs had to say after the Federal Reserve decision:
“looks a bit more hawkish to us … Do note inflation expectations have come down. Forward guidance… considerable time following end of purchase program this month. Plosser and Fischer voted in favor aka must be sufficiently happy with something else in the statement? Kocherlakota only dissent”
What RBC said:
“after inserting the phrase about significant underutilization of labor resources only a couple of statements ago, the fact that they are now saying that underutilization is diminishing, particularly in the context of a Fed Chair who has championed the plight of labor slack, suggests this along is an extremely hawkish change… We are surprised they didn’t leave the door open on QE. In fact, you can argue they basically slammed the door shut.”
Richard Cochinos, head of Americas G10 FX strategy at Citi:
“The dollar positive move you are seeing currently right now, is relative to where the market was. This came in as a more optimistic and more hawkish statement in the fact that it didn’t discuss greater risks to the U.S. overall. It didn’t seem to imply there was any real delay from what the Fed has communicated before.
“The market pricing was for October of 2015 for the first Fed hike. FOMC language, and Fed present language has been for June 2015. So the market is now going to be taking some of its certainty off October and placing it more back towards June and that is ultimately going to be a dollar positive currency move.”
“The Fed is still very data dependent and they do iterate that data dependence in the statement.”
