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Fed could be patient for longer

February 19, 2015

Minutes of the January 28 FOMC meeting showed that the Fed is willing to keep interest rates near zero for longer, given recently disappointing US economic data, geopolitical tensions and slower growth in China. Attention will now turn to Fed Chair Janet Yellen’s testimony next week. Yesterday’s US economic data came in weaker than expected. Industrial production rose only moderately +0.2% in January and building permits as well as housing starts recorded declines at the start of this year.

In Europe, hopes for a quick (preliminary) solution in the Greek debt drama gave equity markets support. The Greek government will submit a request for a six-month loan extension to its creditors, Bloomberg reported. The EuroStoxx 50 climbed to the highest level since June 2008. The Nikkei 225 rose to the highest since May 2000 after Japan’s exports rose +17.0% y-o-y in January on stronger demand from Asia and the U.S., while imports dropped -9.0%.


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