FXStreet (Guatemala) - Analysts at Rabobank explained that they expect the FOMC to remain on its $10bn/meeting tapering course on July 30.
“Given the Fed’s tapering inertia and the re-acceleration of the economy since the extreme winter weather, we expect the FOMC to remain on its $10bn/meeting tapering course on July 30. This will bring down monthly asset purchases to $25bn, from $35bn”.
“Meanwhile, the debate between hawks and doves about the amount of slack in the economy has shifted to wages”.
“As long as wage growth remains muted, the doves – who have an overwhelming majority in the FOMC – will see this as evidence of ample slack and consequently they won’t be in a hurry to start hiking the fed funds target rate”.