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29 May 2013
Flash: Fed can be patient – JP Morgan
FXstreet.com (London) - Research teams at JP Morgan have said that the cyclical arguments for a stronger dollar are more convincing In terms of US cyclical conditions.
Headline inflation has tended to be around 2% (so higher than the current 1.1%), while long-term inflation expectations have ranged from 2.8% to 4% (versus the current 2.9%). Wage growth at the time has ranged from 2% to 3.6% compared to the current 1.9%, and real GDP growth had been averaging 2.4% to 4.9% compared to the current 2.5%. They added that there is no surprise then why the Fed can afford to be a patient with the funds rate even if it begins tapering asset purchases this year.
Headline inflation has tended to be around 2% (so higher than the current 1.1%), while long-term inflation expectations have ranged from 2.8% to 4% (versus the current 2.9%). Wage growth at the time has ranged from 2% to 3.6% compared to the current 1.9%, and real GDP growth had been averaging 2.4% to 4.9% compared to the current 2.5%. They added that there is no surprise then why the Fed can afford to be a patient with the funds rate even if it begins tapering asset purchases this year.