Interest and exchange rate forecast - Seeking clarity

Interest and exchange rate forecast - Seeking clarity

Over the past month it's been more about what central bankers have said, rather than what they've done. Comments made by US Federal Reserve Chair, Janet Yellen, and interest rate forecasts produced by Fed members had markets thinking rate hikes might start earlier than expected.

Economic Analysis

11 April 2014

Fed meeting minutes reaffirm that rates will be on hold for an extended period

While the latest Fed meeting minutes reaffirmed the view that rates will be on hold for an extended period, it highlights the importance of clarity as central banks and markets seek to understand one another in the world of forward guidance. Getting clarity will be ever more important and difficult as forward guidance moves to a qualitative stance.

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