HALISTER1: Fed Saying ‘Relatively’ Gives ‘Wiggle Room’ on Policy: Jefferies

Fed Saying ‘Relatively’ Gives ‘Wiggle Room’ on Policy: Jefferies

(Bloomberg) -- Fed’s July FOMC statement still points to normalizing interest rates and the balance sheet, but raised the recent deceleration in inflation from being a “difficult-to-understand annoyance” to a development that could delay both rate hikes and asset unwind, Jefferies economists Ward McCarthy and Thomas Simons say in note.
  • “The descriptor ‘relatively’ gives policy makers some wiggle room” in the event the labor market, inflation data, “or possibly a debt ceiling crisis, gives the FOMC cold feet in September”
  • Relatively may also mean FOMC could make an official announcement on balance sheet normalization as soon as September
To contact the reporter on this story: Alexandra Harris in New York at aharris48@bloomberg.net To contact the editors responsible for this story: Boris Korby at bkorby1@bloomberg.net Brian Chappatta

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Source: BFW (Bloomberg First Word)

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Thomas Simons (Jefferies LLC)
Ward McCarthy (Jefferies LLC)

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