Tags: Experts | Fed | Hawkish | Policy

Experts: Fed Turned More Hawkish in Latest Policy Statement

By    |   Wednesday, 29 October 2014 08:41 PM

The Federal Reserve adopted a more hawkish tone in its policy statement Wednesday, experts told CNBC

For example, the Fed said in its latest statement that "a range of labor market indicators suggests that underutilization of labor resources is gradually diminishing."

By comparison, in its prior (September) statement, the Fed said, "a range of labor market indicators suggests that there remains significant underutilization of labor resources."

"I thought it was clearly a more hawkish tilt on the part of the Fed," Zane Brown, fixed-income strategist at Lord Abbett, told CNBC. "The Fed did feel better about the economy and inflation going back up to 2 percent."

On the subject of price increases, the Fed said, "Although inflation in the near term will likely be held down by lower energy prices and other factors, the [Federal Open Market] Committee judges that the likelihood of inflation running persistently below 2 percent has diminished somewhat since early this year."

As for interest rates, "maybe we brought forward the [first rate] hike a month or two from where it was yesterday," David Ader, chief Treasury strategist at CRT Capital, told CNBC. Money-market traders had been betting on an October 2015 rate increase as of Tuesday.

Dan Greenhaus, chief global strategist at BTIG brokerage, lauded the Fed's shift in tone.

 "The fact remains that the U.S. economic expansion is continuing, the labor market is improving and general conditions are better today than they were say one year ago," he said, according to The Wall Street Journal. "If that’s the case, then why shouldn’t the Fed speak more optimistically?" 

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The Federal Reserve adopted a more hawkish tone in its policy statement Wednesday, experts told CNBC.
Experts, Fed, Hawkish, Policy
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2014-41-29
Wednesday, 29 October 2014 08:41 PM
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