USD: Fed Remains Forcefully Dovish And May Only Become More So Over Time
Citi discusses the outlook for the Fed's policy trajectory over the coming months.
"CitiFX Strategy noted last week that the Fed remains forcefully dovish, and may only become more so over time with potential changes in leadership. We think that the Fed will welcome 'opportunistic reflation' rather than lean against it anytime soon.
"But we see any signs of lessening enthusiasm for forceful Fed stimulus as one of the most important risks to the broader benign outlook for risk assets. And it is worth noting that some Fed officials have recently commented on the possibility of tapering, even though so far exclusively suggesting that it is not time yet." Citi Economics calls for a tapering announcement in September to commence October," Citi adds.