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Yellen to sound less dovish than minutes

Notes from Standard Chartered Research: In considering Chair Yellen's likely tone at her semi-annual congressional testimony on 24 February, January's minutes may be misleading as the FOMC did not have the bumper January…

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Notes from Standard Chartered Research:

  • In considering Chair Yellen's likely tone at her semi-annual congressional testimony on 24 February, January's minutes may be misleading as the FOMC did not have the bumper January payroll data on hand. 
  • We think this moves the needle somewhat in terms of the Fed's risk assessment and, therefore, it will be difficult for Yellen to sound as dovish as the minutes were. 
  • We expect (relatively) hawkish testimony from Fed Chair Yellen to Congress 
  • With January's payroll in mind, Yellen could keep an upbeat outlook on the economy 
  • Job growth is no longer the issue; key policy question now is when inflation bottoms

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