Overview of Federal Reserve Member Stances
Check out this handy snapshot of Fed member policy stances.
Interest expectations and market volatility are most affected when Fed members go against their assumed stance. Over the coming weeks, Fed member comments will be crucial in guiding market expectations (and market direction). All traders are focusing on how the wider market perceives future Fed policy.
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| Source: Thompson Reuters |
For the time being everyone is happy to assume that the Fed will be withdrawing additional stimulus measures at the end of 2013 or in 2014. These expectations have led to stock market declines, higher bond yields and futures markets have started to price in a higher probability of the Fed raising base interest rates in 2014. Considering that financial markets remain largely dependent on Fed support, it will be interesting to see how this theme develops. The Fed may allow hawkish expectations to fester and grow (this would be equity market negative and could add pressure to already stretched credit markets) or reign those expectations in because the FOMC may feel that their words on June 19th have been largely misinterpreted or 'overstood' i.e. QE is not about to end anytime soon. In this case, equity markets are likely to see new highs, USD is likely to weaken and commodity prices rise.
Commissioned by Think Forex
Written by George Tchetvertakov
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