The issue of the Fed taking action on tapering still remains somewhere in the middle. The progress of the economy and price developments that may raise the organic inflation rate of the USA, although it seems temporary, may cause the Fed to consider the interest rate hike earlier. While the minutes reflect the economic situation 3 weeks ago, Powell recalled that it was too early to start talking about the reduction of bond buys in the press release of the meeting in question. The new model tapering effect will need to be addressed by considering the current conjunctural situation in terms of asset prices, especially by evaluating the relationship with inflation expectations. The Fed is likely to determine the direction in the market in the short term. Earlier probability of earlier rate hike is Treasury yields and dollar positive.
For the week ending May 15, the seasonally adjusted jobless claims figure was 444,000, down 34,000 from the previous week’s revised level. This is the lowest level after the week of March 14, 2020, at 256,000. The previous week’s level was raised from 473,000, which was revised up 5,000, to 478,000. The 4-week moving average was 504,750, down 30,500 from the revised average of the previous week. This data is also the lowest level since the week of March 14, 2020, which is 225,500. Good data supporting the current employment growth trend. However, it will be important to turn this into a long-term organic employment increase and the decline of long-term unemployment.
Other countries will have to position themselves with the Fed. It is necessary to monitor the vulnerability factors, the CDS and inflation levels of the countries will determine the degree of divergence in risk assessments. The Fed is not tapering yet, and the rate hike is a phase that will take place much later. Therefore, it is not expected that there will be a change rather than the current conditions in order to start communication. FOMCs in the summer months will be critical.
Kaynak Tera Yatırım
Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı
