USD decline after the FOMC - about that dissent
Bank analyst responses to the Federal Open Market Committee June 2019 decisions.
Bank of Montreal acknowledge the shift to more dovish but also add that the drop in the US dollar was exacerbated by the first dissent on the FOMC since Powell became Chair. James Bullard (president of the Federal Reserve Bank of St. Louis) wanted an immediate 25bp cut. He was the only dissent.
Elsewhere, analysis suggests not to get too convinced of the FOMC dovishness:
- The FOMC is watching the prospects for a deal with China and also incoming economic data …. no deal & poor bad data will bring a July rate cut
- FOMC is not as dovish as first responses indicate:
- median dot plot shows no cuts in 2019
- But some participants see 2
- The median projections is for one cut in 2020
- Yes 'patient' was dropped
- Powell said there was not much support within the FOMC for a rate cut, awaiting incoming data. Indeed the data is good (however global growth is a weight on the outlook)