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19 Jun 2013
Flash: Fed to sound less dovish but not expected to taper yet - TD Securities
FXstreet.com (Córdoba) - At today's FOMC meeting, the Fed is expected to maintain its accommodative policy stance, with only slight upgrades to the economic assessment provided in the statement, says the TD Securities analyst team.
According to TD analysts, the Fed will issue a relatively less dovish statement and upbeat economic assessment, but how market reacts will be determined in large part by the narrative that develops at the subsequent press conference. "We expect the Chairman to use the conference as a platform for emphasizing the message that the Fed is still easing policy, albeit at a reduced level".
"That said, with the market appearing to be positioned for a September tapering announcement, the price action is not likely to be driven by a tapering signal, but instead by any indications on the size of tapering", TD says. "At the moment, we see the Fed reducing its monthly purchase size by between $10B and $15B. This also seems to be the level of reduction currently being priced into the markets".
According to TD analysts, the Fed will issue a relatively less dovish statement and upbeat economic assessment, but how market reacts will be determined in large part by the narrative that develops at the subsequent press conference. "We expect the Chairman to use the conference as a platform for emphasizing the message that the Fed is still easing policy, albeit at a reduced level".
"That said, with the market appearing to be positioned for a September tapering announcement, the price action is not likely to be driven by a tapering signal, but instead by any indications on the size of tapering", TD says. "At the moment, we see the Fed reducing its monthly purchase size by between $10B and $15B. This also seems to be the level of reduction currently being priced into the markets".