US: Fed’s deflation fears are easing
The FOMC statement was less dovish than we had expected. The committee decided to retain the target range for the fed funds rate and leave the size, timing and scope of the Fed’s security purchase programmes unchanged. In general, the committee has become less worried about deflation and more optimistic on growth. Still, inflation pressures are regarded as absent with slack in the economy set to keep cost pressures in check despite the recent rise in commodity prices. The statement repeated
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US: FOMC - No change in rates
No change in rates, no change in economic outlook, no additional quantitative easing and no liquidity exit from the Fed. Four negatives in the the FOMC statement but only one seemed to register with the currency market, no additional quantitative easing. Treasury rates moved modestly higher and the dollar rallied. The FOMC "expects that inflation will remain subdued for some time", and "that economic conditions are likely to warrant exceptionally low levels of federal funds for an extended
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Czech Republic: CNB keeps interest rates on hold
At today’s monetary policy setting meeting the Czech central bank decided to leave its key policy rate unchanged at 1.50%. Details The Czech central bank (CNB) surprised markets at its monetary policy setting meeting today when it decided to maintain its key policy rate at 1.50% even though most market participants had expected a further 25bp rate cut. We thought the CNB would leave interest rates on hold. Market reaction: EUR/CZK is marginally higher while 2y yields increased approximately
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