Analysts' reaction to the Fed

The Federal Reserve said on Wednesday that it would be 'patient' in beginning to normalize policy (=raising interest rates).

Here’s what the analysts and economists think of the Fed’s statement.

TD Securities: “The overriding tone of the report suggests that the Fed might be moving closer, rather than farther away, from the start of policy tightening. This was particularly evident in the upbeat growth and unemployment assessment.”

Deutsche Bank: “Unlike the Fed’s decision to use the word ‘patient’ in January 2004, five months before the initial tightening of monetary policy, the current verbiage ties the fed funds liftoff explicitly to economic criteria, namely inflation. Bottom line: If inflation does not trend toward 2% next year, then the Fed will not begin raising interest rates.”

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