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It's not just about tapering at FOMC
The build up to the September FOMC meeting has been rather intense, and the reason? Tapering. But as Saxo Bank's Mads Koefoed explains, there are other element investors should look out for when the Fed meets on 17-18 September.
For example, he says that mortgage backed securities will continue at the current rate of USD 40 billion a month. Over the last couple of months US housing data has been "rather weak", so he expects the Fed to keep its position on this.
Unemployment is another area which the Fed will focus; it dropped 7.3% in August which means it is getting close to the central bank's target of 6.5%. As a result, Mads says they could come out and announce a lower threshold.
Speaking about the Dollar, Mads warns that markets are perhaps expecting a bit "too much" from the Fed and that it may surprise them with a softer approach than anticipated. This means we could see a strengthening of the euro dollar, and a weaker dollar, following the meeting.
Read more about Mads' predictions here:
http://www.tradingfloor.com/posts/fed-preview-dipping-toe-tapering-waters-411025513
01:37 minutes
Tags: dollar, employment, eur, euro, federal reserve, fomc, fomc meeting, housing data, jobs, lea jakobiak, mads koefoed, mortgage backed securities, mortgages, nonfarm payrolls, saxo bank, saxo tv, tradingfloor.com, unemployment, us dollar, us economy, us housing market, us jobs data, us mortgage applications, usd