Conjecture around when interest rates will rise in the US will again take front stage as the FOMC meet on Thursday and Friday

Conjecture around when interest rates will rise in the US will again take front stage as the FOMC meet on Thursday and Friday. These are three key points to keep an eye on 1) Will they drop the 'considerable time' phrase when it comes to the timeline for policy normalisation? It is believed this phrase signifies that the FOMC are 6 months away from tightening. If it goes the markets will begin to price in the likelihood that the first move will occur in late Q2 rather than Q3 as markets currently have priced. 2) Any significant changes to GDP, unemployment and core PCE price inflation will offer an insight as to reasons behind the wording of the policy statement. 3) The dot chart, something that can be used to provide the mean FOMC rate forecast will also be influential. The chart attached shows how Fed members have been gradually moving forward expectations for rate hikes over the course of 2014.


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