Back
29 Dec 2014
Barclays: Fed’s tightening cycle dependent more on labor markets than inflation – eFXnews
FXStreet (Barcelona) - The eFXnews Team notes Barclays feels that the timing and pace of the Fed’s tightening cycle will be driven by labor market conditions rather than inflation.
Key Quotes
“The Fed’s answer to the slide in long-term breakeven inflation is rooted in labor markets, notes Barclays Capital.”
"Chair Yellen said the committee’s confidence in hitting its inflation mandate is predicated on further improvement in labor markets triggering wage growth which, in turn, would cause inflation to firm....These projections—where unemployment trends lower and inflation remains subdued—is consistent with our view that the timing and pace of the tightening cycle will be driven by conditions in labor markets, as opposed to developments in actual inflation," Barclays notes.”
“"Given these conditions, the Fed may be patient, but its patience is finite," Barclays argues.”
“Barclays retains its baseline outlook for the first rate hike in June 2015 and for a target of 75-100bp by year-end.”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
“The Fed’s answer to the slide in long-term breakeven inflation is rooted in labor markets, notes Barclays Capital.”
"Chair Yellen said the committee’s confidence in hitting its inflation mandate is predicated on further improvement in labor markets triggering wage growth which, in turn, would cause inflation to firm....These projections—where unemployment trends lower and inflation remains subdued—is consistent with our view that the timing and pace of the tightening cycle will be driven by conditions in labor markets, as opposed to developments in actual inflation," Barclays notes.”
“"Given these conditions, the Fed may be patient, but its patience is finite," Barclays argues.”
“Barclays retains its baseline outlook for the first rate hike in June 2015 and for a target of 75-100bp by year-end.”
This content has been provided under specific arrangement with eFXnews.