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Analysts at ANZ New Zealand Bank explained that, recently, Fed speakers have been interpreted on the hawkish side.  

Key Quotes:

“They have emphasised the planned path of rate hikes and the risk of overheating on the back of very strong US data, making it clear that they will not stand back from raising rates further, which could push bond yields higher and add to volatility.”

“Overnight Fed’s Kaplan struck a slightly more cautious tone with regards to rate hikes, saying that he isn’t sure yet if the Fed should raise rates past neutral and that the flattening yield curve reflects a sluggish or uncertain growth outlook.”

“Attention is turning to US CPI data out on Thursday night. Although oil continues to trend higher, base effects should start to drag its contribution lower. Expectations are that headline inflation rose 2.4% y/y in September, down from 2.7% in August.”

“Core inflation is expected to tick up from 2.2% y/y to 2.3%. A print in line with expectations would provide some reassurance that inflation is not getting away, despite current economic strength.”