Back
24 Feb 2015
Yellen’s testimony to mirror the minutes – DB
FXStreet (Barcelona) - Economists at Deutsche Bank, expect today’s Yellen’s testimony to reflect January’s FOMC meeting minutes, but further anticipate the Fed Chair to sound more upbeat on the US economy.
Key Quotes
“We expect Ms. Yellen’s testimony to largely mirror the minutes from the January 27-28 FOMC meeting, which did not indicate any substantive changes to the projections for near-term growth or long-term inflation compared to the Fed’s December forecasts.”
“However, Yellen may sound even more upbeat on the economy in light of the strong January employment report, which showed substantial upward revisions and a sharp bounce-back in wage growth.”
“As such, Yellen may be less dovish than market participants anticipated following the release of this week’s January meeting minutes. If recent Fed-speak is any indication, the Chair will likely be making the case to Congress that the time is approaching for the Fed to begin the process of policy normalization, and if the data continue to support the Fed’s forecast, this could commence around the middle of this year.”
Key Quotes
“We expect Ms. Yellen’s testimony to largely mirror the minutes from the January 27-28 FOMC meeting, which did not indicate any substantive changes to the projections for near-term growth or long-term inflation compared to the Fed’s December forecasts.”
“However, Yellen may sound even more upbeat on the economy in light of the strong January employment report, which showed substantial upward revisions and a sharp bounce-back in wage growth.”
“As such, Yellen may be less dovish than market participants anticipated following the release of this week’s January meeting minutes. If recent Fed-speak is any indication, the Chair will likely be making the case to Congress that the time is approaching for the Fed to begin the process of policy normalization, and if the data continue to support the Fed’s forecast, this could commence around the middle of this year.”