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FOMC unlikely to tee up the first rate hike - BNP Paribas
FXStreet (Bali) - The FOMC is unlikely to tee up the first rate hike in its policy statement this week, with no significant changes likely in the language, notes the US Economics Team at BNP Paribas.
Key Quotes
"At its 28-29 April meeting, we expect the thrust of the FOMC’s discussion of current economic conditions to be that the lull in Q1 economic activity was probably due to adverse weather conditions across the US and port disruptions on the West coast."
"The Committee will be expecting a bounce-back in Q2. In terms of the labour market, policymakers will likely continue to see a range of indicators as signalling that progress is being made; although it will acknowledge that the rate of improvement slowed in March."
"Inflation has been a bit higher than the market expected and measures of “inflation compensation” appear to have stabilised. In all, we expect the bulk of the Committee to feel that their medium-term projections remain broadly on track, despite a temporary setback in Q1."
"On the foreign front, Europe looks better in growth terms, but Greece is sailing closer to the edge, while Chinese data have shown softer growth and the exchange rate has levelled off. Global developments will likely continue to be seen as the predominant downside risk to the US outlook."