Markets Likely to Give Back Some of Post-Fed Moves: State Street
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Lee Ferridge (State Street Corp)
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UUID: 7947283
(Bloomberg) -- FX and rates markets were looking for a more dovish message in the Fed’s dot plot, which didn’t happen, State Street strategist Lee Ferridge says in phone interview.
- Fed announcement "fairly benign and expected," market reaction was surprising; makes sense for Fed to give itself optionality, and expectation for Fed to remove its 2017 hike from the dot plot "was a bit naïve"
- Market will probably realize its reaction was overdone; EUR/USD should see bottom not far from post-Fed levels and drift back toward 1.20
- Lowering of the terminal fed funds rate to 2.75% from 3% is most significant thing from FOMC today
- Fed has continuously lowered its terminal fed funds rate forecast without much discussion; "at some point you’ve got to start questioning the models"
- Ferridge says terminal rate probably closer to 2% area
- Doesn’t expect Fed to raise rates again this year as "data isn’t there"
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Lee Ferridge (State Street Corp)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283