FXStreet (Guatemala) – Analysts at SEB Group explained that the impression of the overall comments related to the economy in the first paragraph of the statement is that the Fed is not completely satisfied with the progress in economic activity.
Key Quotes:
“According to the Fed “economic activity has been expanding moderately after having changed little during the first quarter”. The underutilization of labour has “diminished somewhat” while the pace of job gains “picked up”, household spending “has been moderate” and business fixed investment and net exports “stayed soft”. Just like in April they, however, still expect better times ahead.”
“Apart from these changes most of the statement was just a copy paste of the previous one in April. In line with these comments the Fed lowered the projections for growth in 2015 to 1.8 to 2.0% from previously 2.3 to 2.7%, which probably mostly reflects the weak start to the year. Meanwhile growth projections for 2016 and 2017 remain basically unchanged.”
“With signs that the US economic activity currently improves again after the weak start to the year and considering the strength of the labour market a September lift-off remains our main scenario.”
“However, undoubtedly the probability has decreased as all alternatives seem to be on the table listening to the Yellen press conference.”
(Market News Provided by FXstreet)