Shaikh Financial Services

QUESTIONS? CALL: 051-2525412
  • HOME
  • ABOUT US
    • Our Company
    • Our Mission
    • Our Philosophy
    • What We Aspire
    • Our Clients
    • Our Approach
  • OUR SERVICES
    • Research and Analytics
    • Subscriptions
    • Financial Planning
      • Overview
      • Children Education
      • Children Marriage
      • Wealth Creation
      • Retirement Plan
      • Tax and Estate Planning
      • Insurance/Takaful Planning
    • Wealth Management Advisory
      • Overview
      • Our Process
      • Investment Approach
      • Asset Allocation Strategies
      • Risk Management & Monitoring
    • Financial Consultancy
    • Startup Advisory
    • Trainings and Education
    • Real Estate Advisory
    • Taxation Consulting
  • WHY US
    • Overview
    • Why our Preference
    • Expertise
    • Fee Only Advisor
    • Safety of Funds
    • Becoming a Client
  • MISCELLANEOUS
    • Appointments
    • Disclaimer
    • FAQs
    • Testimonials
  • BLOG
  • CONTACT US
    • Careers
    • Contact Us

FED Leaves Benchmark INTEREST RATES Unchanged.

by SFS Research / Thursday, 28 April 2016 / Published in Stocks

As expected the Federal Reserve held the Fed Funds rate target unchanged at 0.25-0.5%. The vote was 9-1, with Kansas City Fed boss Esther George again dissenting from the hawkish side.

As for hints about June, the policy statement takes note of continuing strengthening in labor markets, but also of a moderation in household spending and inflation continuing to run below target.

SUMMARY:

No surprises from the Fed.

Global conditions upgrade.

Domestic growth downgrade.

Data Dependence persists.

No balance of risk assessment.

FOMC Details (27-04-2014)  :

The FOMC delivered a statement largely as expected. It upgraded its assessment of the global economy by dropping the reference to risks. It downgraded its assessment of the domestic economy by acknowledging that growth has slowed.

Otherwise is general economic assessment remains little changed. The labor market continues to improve, though growth in household spending has slowed. Housing is stronger though fixed business investment and net exports have been soft (though not as soft as it looked before today’s advance reading of March merchandise trade balance that showed a sharp improvement that spurred some to revise up their forecasts for Q1 GDP due out tomorrow).

The Fed’s forward guidance has not changed. It is looking through the economic soft patch and expects the growth to strengthen. The Fed recognized that inflation is still below target, but as transitory factors subside, it expects to reach 2% in the medium term. The statement left no doubt that the central bank remains data dependent.

There was a little hint about its intentions for June, which follows logically from being data dependent. KC Fed President George repeated her March dissent favoring an immediate hike. The market is not buying it, however. The Fed funds futures continues to price in a small (~20%) chance of a June hike. The markets have whipsawed in response to the statement which helps no surprises.

In addition to not being convinced about the recovery of the domestic economy, many are concerned that global considerations may deter the Fed from hiking in June. The UK referendum takes place a week later. Spain has a do-over election after the vote last December failed to produce a government. European tensions with Greece are on the rise. MSCI Emerging Market equity index has rallied more than 25% since January. Oil is up 70% from its lows. Neither move looks likely to be repeated over the next couple of months.

The Fed’s decision to stand pat here in April, when there was no press conference scheduled, is unlikely to play a significant role in the decisions of other central banks, including the Bank of Japan tomorrow. We earlier argued that the FOMC statement was unlikely to add substantially to investors and policymakers information set. This seems to be very much the case.

Research Team,

Shaikh Financial Services

  • Tweet

About SFS Research

What you can read next

Protected: PSX Strategy For Investors
Center for International Development at Harvard University predicts 5% Economic Growth in Pakistan for next 10 years.
Is Iranian Cement threat to Pakistani Cement Industry ?

Recent Posts

  • Where is the PKR heading ?

    ...
  • Bitcoin: What’s Next ?

      Bitcoin is currently trading at $11,500,...
  • Bitcoin Trade Call Update.

    Bitcoin recently made a low of $9200 and is in ...
  • Bitcoin: TOP In The Making, Free Exclusive Trade Call

      Bitcoin is currently trading just under ...
  • Protected: PSX Strategy For Investors

    There is no excerpt because this is a protected...

Categories

  • Commodities
  • General
  • Stocks
  • Uncategorized

Shaikh Financial Services, a global trusted name in the financial services arena, offers the entire gamut of financial services under one roof. We provide our clients integrated, robust and reliable solutions. Clients turn to us for our unbiased data driven research, advisory, consultancy. financial planning & trainings. Our goal is to create wealth for our retail and corporate clients through data analytics, sound research and appropriate strategies.

  • OUR COMPANY
  • FEE STRUCTURE
  • OUR CLIENTS
  • RESEARCH & ANALYTICS
  • FINANCIAL PLANNING
  • WEALTH ADVISORY
  • FINANCIAL CONSULTANCY
  • STARTUP ADVISORY
  • REAL ESTATE ADVISORY
  • TRAININGS & EDUCATION
  • SUBSCRIPTIONS
  • APPOINTMENTS

FOR APPOINTMENTS

Call, WhatsApp or Email us at:
Pakistan: +92 331 9996699
International: +971 50 824 5340
Email: info@shaikhfinancialservices.com

Address: M-13, Emirates Tower,
F-7 Markaz , Islamabad.

  • GET SOCIAL
Shaikh Financial Services

© COPYRIGHT 2009-2024 SHAIKH FINANCIAL SERVICES, ALL RIGHTS RESERVED.

TOP