News Headline Summary

Several on FOMC said Fed should be prepared to vary pace of QE

- Several Fed officials warned of reducing or ending QE too soon.
- A number of Fed officials said tapering QE may become necessary.
- Fed officials saw less risk China's economy would slow abruptly.
- FOMC participants saw downside risks to growth from Europe.

Analysis details (19:24)

- Although these minutes were less dovish, there were comments that highlighted risks of halting QE too early. FOMC members are still concerned about costs of more buying.
- With these minutes, they were largely as expected however there was an outside chance they could be dovish due to the new FOMC voting members, and hence the reactions observed across asset classes.

- In an interesting note this more hawkish than previous tone from the FOMC is in stark contrast to that seen from the BoE this morning and BoJ in recent weeks.
- Market participants will now look ahead to next Tuesday when Bernanke will be appearing at the Senate banking committee.

20 Feb 2013 - 19:00 - Fixed Income Bank Speaker - Source: Newswires

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