THe Federal Reserve releases the FOMC minutes later on Wednesday. What can we expect from the minutes?
Here is their view, courtesy of eFXdata:
Bank of America Global Research discusses its expectations for tomorrow’s FOMC meeting minute.
“The FOMC minutes should provide more detail about the possible strategies Fed officials are discussing to “enhance forward guidance.“ There seems to be a growing consensus that an optimal path is to use outcome-based guidance, linking the ZLB to an average inflation target of 2%. The Fed could also consider strengthening this commitment with date-based guidance, suggesting that an average inflation rate of 2% won‘t be reached until a given date, reinforcing the intention to keep rates at the ZLB for a prolonged period. The bigger debate seems to be over whether to use balance sheet to support forward guidance which could take the form of yield caps or a chance in the composition of the B/S. The pros and cons of each approach will be informative,” BofA notes.
“Given that we expect some changes in the upcoming September meeting, these minutes will be a useful way of communicating the potential adjustments to policy,” BofA adds.
For lots more FX trades from major banks, sign up to eFXplus
By signing up for eFXplus via the link above, you are directly supporting Forex Crunch.
Share
