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17 Jun 2013
Flash: Tapering talks in focus - DBS
FXstreet.com (London) - "The Fed meets this week and not a moment too soon". DBS, Group Research.
DBS Group Research have explained that that at its last FOMC meeting on 1May,the data had been so bad the Fed made a key change to its official statement: it said QE could be dialled up as well as down if the data mandated it.
Markets seem to have forgotten this, they said, in part because there is a broad perception that the data have improved since the last FOMC meeting and partly because Bernanke told Congress on 22May that QE could be scaled back at one of the upcoming meetings – again, if the data supported it. While this wasn’t Bernanke’s key point in his testimony – in fact they suggest that his key point was that scaling back would be very unwise – markets and the media have focussed on the lesser point and have been unusually volatile ever since, not wanting to be caught wrong-footed.
DBS Group Research have explained that that at its last FOMC meeting on 1May,the data had been so bad the Fed made a key change to its official statement: it said QE could be dialled up as well as down if the data mandated it.
Markets seem to have forgotten this, they said, in part because there is a broad perception that the data have improved since the last FOMC meeting and partly because Bernanke told Congress on 22May that QE could be scaled back at one of the upcoming meetings – again, if the data supported it. While this wasn’t Bernanke’s key point in his testimony – in fact they suggest that his key point was that scaling back would be very unwise – markets and the media have focussed on the lesser point and have been unusually volatile ever since, not wanting to be caught wrong-footed.