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9 Dec 2014
Fed is anticipating maintaining current rates - BNP
FXStreet (Guatemala) - Analysts at BNP Paribas explained and noted that the US labour market is strengthening, rather rapidly as of recently, and the unemployment rate is getting closer to its equilibrium level.
Key Quotes:
“But even so, the Fed still anticipates maintaining current interest rates for a considerable time following the end of QE3”.
“The reason why is that the decline of the unemployment rate markedly overstates the improvement of the labour market which remains characterised by a high level of underutilisation”.
“Measuring the remaining slack is tricky, as identifying its relationship with wages, but the subdued pace of increase, in both salaries and prices, supports the hypothesis that underemployment is and will keep on preventing inflation pressures from building. The dual mandate of the Fed indeed calls for accommodation to remain”.
Key Quotes:
“But even so, the Fed still anticipates maintaining current interest rates for a considerable time following the end of QE3”.
“The reason why is that the decline of the unemployment rate markedly overstates the improvement of the labour market which remains characterised by a high level of underutilisation”.
“Measuring the remaining slack is tricky, as identifying its relationship with wages, but the subdued pace of increase, in both salaries and prices, supports the hypothesis that underemployment is and will keep on preventing inflation pressures from building. The dual mandate of the Fed indeed calls for accommodation to remain”.