Home The notable change by the Powell’s Federal Reserve System – Nomura
FXStreet News

The notable change by the Powell’s Federal Reserve System – Nomura

Analysts at Nomura explained that a notable change by the Powell Fed has been the shift to tighten financial conditions, rather than purely to focus on employment and inflation.  

Key Quotes:

“This is evident by the Fed’s reluctance to become dovish on weak equity and credit market performance. This may have been  easy  call to make around the VIX shock of early February, which came and went relatively quickly, but since  mid-April  this may be more challenging. Since then both credit spreads and the dollar have risen, while US stocks have rallied. This is something we have seen for a while.”

“It appears that equities are taking solace from tax-cut-boosted EPS and upcoming share buybacks, while credit and the dollar are being affected by tighter liquidity conditions.”

“The worsening credit picture and stronger dollar mean that US financial conditions are deteriorating, which in turn should affect the US growth picture and pricing of Fed tightening.”  

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.