Oversea-Chinese Banking Corp: Fed rate meeting changes not surprising, no clear dovish tilt
Oversea-Chinese Banking Corp Hong Kong economist Jiang Jing says the US Federal Reserve's reduction of rate-setting meetings to seven and possible suspension of quarterly economic forecasts are not surprising. She notes no clear dovish tilt under Chair Walsh and expects greater market reliance on ec
Oversea-Chinese Banking Corp (OCBC) Hong Kong economist Jiang Jing has said the US Federal Reserve's decision to reduce its number of rate-setting meetings to seven next year and to possibly stop publishing quarterly economic forecasts is not surprising. Jiang made the remarks after the Fed announced it would also turn its October meeting into a dedicated monetary policy strategy session.
Jiang noted that since Chair Walsh took office, the Fed's monetary policy decisions have remained data-driven, with no clear dovish tilt. She said the adjustment in the number of meetings would not change the direction or stance of policy. The October strategic discussion, she believes, is mainly to align with research progress and reporting schedules, rather than being deliberately timed to coincide with specific economic data releases.
The economist estimated that without the Fed's own economic forecasts, the market will rely more heavily on economic data. She predicted that on days when key data are released, single-day volatility in interest rate markets would increase. If inflation rises or remains persistently high, financial markets may price in a higher likelihood of rate hikes, leaving greater room for policy uncertainty.