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17 Dec 2013
Flash: Bullard calling for a taper – Rabobank
FXstreet.com (London) - With the markets focus this week on the FOMC, strategists at Rabobank noted that the centrist of the FOMC, James Bullard, who is a voting member, has called for a small taper in December.
Key Quotes:
“He thinks that this would acknowledge the improvement in the labor market since the start of QE3, while giving the Committee the flexibility to reverse course if inflation continues to linger too far below the Fed’s 2.0% target”.
“However, we should keep in mind that being a centrist in the FOMC is not the same as being the median voter. That would only be true if the views of the voting members were distributed symmetrically around the centrist view. But this is obviously not the case”.
“The vast majority of the FOMC can be characterized as doves and it remains to be seen how they perceive the final hurdle, the low inflation rate”.
Key Quotes:
“He thinks that this would acknowledge the improvement in the labor market since the start of QE3, while giving the Committee the flexibility to reverse course if inflation continues to linger too far below the Fed’s 2.0% target”.
“However, we should keep in mind that being a centrist in the FOMC is not the same as being the median voter. That would only be true if the views of the voting members were distributed symmetrically around the centrist view. But this is obviously not the case”.
“The vast majority of the FOMC can be characterized as doves and it remains to be seen how they perceive the final hurdle, the low inflation rate”.