Friday, June 25, 2010
Central Banks – there were two important developments on the central bank front this week $FED
Central Banks – there were two important developments on the central bank front this week, from the FOMC and the BOE. On the former, Wed’s statement was more dovish than expected, as the language discussing growth was downgraded (which was somewhat expected) while the inflation discussion acknowledged that upward price pressures have greatly diminished (the inflation commentary took some people by surprise). While Hoenig dissented again, investors took the release to signal that rates would remain low for an extended period (recall JPMorgan’s M Feroli recently pushed out his call for a Fed rate hike until Q4:11 due to minimal inflationary pressures).
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