By eFXdata — Jul 28 - 02:38 PM
CIBC Research discusses its reaction to today's FOMC policy statement.
"The Fed could have chosen to sound new alarm bells about Covid impacts on growth, or a spike in inflation, but opted to leave them on mute. They removed a reference to cases of Covid further declining, but changed the reference to impacted sectors to note that they’ve now seen improvement, and retained the base case that vaccinations will improve the situation ahead," CIBC notes.
"Remember that the Fed will only update its forecasts in September, so this meeting was unlikely to be very decisive in terms of any new thinking on the outlook or the policy response. If, as we expect, the economy and job market continue to improve, the September meeting is more likely to be used to give the formal warning about a tapering in early 2022. Overall, it’s a bit hawkish given that the Fed didn’t add any cautionary notes to the outlook with respect to the Delta variant," CIBC adds.
CIBC Research/Market Commentary