- Says unemployment has been a positive surprise
- Supported Fed statement last week but says it’s premature to remove “considerable time”
- More natural to drop “considerable time” language at October’s FOMC
- Still sees first tightening at end of Q1 2015
- Sees US growth exceeding 3% in US in H2 2014 and in 2015
October sees the end of Fed QE (get the party hats out) and it could well be the point whereby the Fed drop the “considerable time” line from their statement. If the rest of the month produces good data and we get a strong NFP the market is going to get itself all worked up again, like it did last week.
As we’ve been pointing out for a while, the market is still straining at the leash and the October FOMC could be the last explosion before rate rises get priced in and expectation priced out.
