The market is focused on the possibility of rate hikes next year following the FOMC decision.
The US dollar is up at least 50 pips against virtually every currency since the decision. The market is focused on the possibility of hikes (or more rate hikes) in 2015 based on the economic projections.
Some are arguing, however, that the Fed has ruled out rate hikes for a ‘considerable’ time with this statement.
The Committee continues to anticipate, based on its assessment of these factors, that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends.
At the $10b pace of taper, it will be at least Oct 29 by the time the Fed finishes tapering. What is a ‘considerable time’ after that? You’d think that’s at least 6 months.
