FXStreet (Guatemala) – Rob Carnell, analyst at ING Bank explained that the latest set of Fed minutes are on the dovish side, acknowledging that the US economy slowed into the end of last year, even as the labour market continued to make further gains.
Key Quotes:
“The new minutes also include a phrase in the second paragraph that has echoes of one used in September 2015, when the Fed held fire amidst anticipation of lift-off, given concerns about China’s slowing economy (amongst other things).
The new line reads “ The committee is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook”.
So the policy ping-pong continues between central banks. And in its own subtle way, this is a “Right back at you!” to ECB President Mario Draghi’s dovish statement at last week’s ECB press conference. The greater concern about the global environment shown by the Fed should encourage investors to realize that they are not about to go crazy with rate hikes this year.
As such, we can see markets taking some comfort from these words, though without a meaningful improvement in the run of macro data, in particular from China, it is hard to see this having a lasting effect.”
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