Fed to look through political fog - ANZ

In view of analysts at ANZ, ‘Fed speak’ and the minutes of the FOMC May meeting could take on added significance this week as financial markets tussle with the implications of the turmoil besetting the Trump administration.

Key Quotes

“Although the statement that accompanied that meeting was upbeat and regarded the weakness in Q1 GDP as transitory, it will be interesting to see the range of debate within the FOMC and whether any members made any explicit reference to a June hike.”

“With regard to the FOMC speakers this week, we think it unlikely any will get drawn into the political fog, and most will stay focused on the economy which is showing evidence of reaccelerating in Q2.”

“In the coming weeks the political dynamic and its impact on overall financial conditions will be worth watching closely. If the politics were to take a nasty turn for the worse and have a sustained negative impact on financial markets, then this could make the FOMC’s decision at the 13-14 June meeting less straightforward.”