Analysis About Federal Open Market Committee Monetary Policy

I wrote a daily market analysis for, for several months. This is a sample article from March 18, 2015

Federal Reserve May Not Hike Rate in Q2’15 Amid Deflation Worries


Although the labor market condition improved and unemployment rate came down to 5.5% in February, the broader economic landscape has drastically changed since the last FOMC  meeting. One of the major concerns is that the inflation rate has gone down to -0.10 in January. The second concern is the surprising resilience of the US Dollar against other major currencies, which will impair US competitiveness in the global market.

Commenting on the situation, the Senior US Economist of Goldman Sachs, David Mericle, told the press that “despite the continued improvement in the labor market, inflation has fallen further below the Fed’s target and wage growth has yet to pick up.”

Forex market participants are now skeptic regarding the Fed’s ability to hike the rate by the second quarter of 2015, especially, when the economy is experiencing deflation. Moreover, the Federal Reserve has some room to allow the unemployment rate to decline below 5%, which can certainly increase the inflation rate. However, unless the inflation rate goes above 2% by June, there is hardly any possibility to see the rate hike being materialized.

You can read the full article here.


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