This via TD on Wednesday's Federal Open Market Committee statement:
- Tapering will be announced.
- The Fed's base case for "liftoff' is likely to remain dovish, with "elevated" inflation ultimately proving "transitory," and thus no rush for rate hikes, but the chair will likely signal openness to responding if the case for transitory keeps weakening.
- A firmer USD as a 'flexible' Fed alongside expectations of a strong payrolls report later this week and better seasonal trends help align FX with front-end repricing. USD is attractive on a series of tactical valuation and positioning indicators.
TD cheat sheet:
