FOMC Preview: Three Themes on the Path to a Dovish Taper
- By Jon Turek
- 4 min read
Much has changed since the April FOMC meeting. We have had two high inflation prints, employment gains have been slower than consensus estimates, and the Fed has introduced language that at some point this year it may be appropriate to reduce the pace of asset purchases.
I have broken my Fed preview down by sections and by what I will watch for in each.
Statement
In the statement, do we get any more language on ‘transitory’? Right now, the second paragraph about inflation says, ‘inflation has risen, largely reflecting transitory factors.’ It will be interesting to see if the Fed adds to that. This could serve to embolden ‘transitory’ via adding duration. The big theme to watch in general for the Fed this summer is whether ‘transitory’ evolves from a few months to maybe a year. The second paragraph will be important on that front.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.