Archive for March, 2007
FOMC March 20-21st Meeting
The statement had important changes FOMC increases flexibility and moves a step closer to neutrality Fed’s hawkish bias changed to implicit from being explicit Although the wording moved closer to neutral As widely expected the FOMC kept rates steady at 5.25% for the sixth consecutive meeting. Although the wording of the statement had important changes, we judge that the statement remains consistent with an extended pause. However, the probability of policy easing probably increased, while
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FOMC March 20-21st Meeting
• FOMC’s predominant concern is the “risk that inflation will fail to ease as expected” • Fed’s communication is consistent with the policy staying on hold and suggests that the Fed is a long way from easing • We expect the hawkish bias to remain unaltered The tone of Fed’s communication remains consistent with a tightening bias In the intermeeting period, economic data has come on balance on the soft side, especially data on business investment. However, concerns on downside
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