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A snippet from Citi on the Federal Open Market Committee meeting:
- "Two aspects of this Meeting will be closely watched:...
- 1- We expect the Fed to complete its final phase of net asset purchases.
- 2- Any signaling on the pace and size of rate increases, and the run-off of asset holdings.
- We think the Fed will signal the beginning of the rate hiking cycle but otherwise remain vague about the pace and timing, and signal that it is likely to begin balance sheet run-off 'later this year'. Even though we do not expect any precision, we expect the Fed to guide towards a gradual rate hike path. In line with the above, and Citi US economists' view, we think that a 50bps hike is very unlikely in March,"
- "The key hawkish risk to our view is for the Fed to end QE early, unless the Fed counterbalances an early end to QE with a clear desire to raise rates even more gradually,"
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Earlier FOMC previews:
- Goldman Sachs expect FOMC rate hikes in March, June, Sept and Dec but the risk is for more
- Société Générale - "Fed is likely to push back"
- Scotia expects a Federal Reserve lift-off rate hike in March
- Federal Reserve FOMC meeting this week -BoA expect on hold
- Tomorrow's FOMC likely to trigger another leg of USD rally - BofA
