Please find below our Jackson hole preview and how the market reacted last year.
US: Jackson Hole Preview {http://bit.ly/oFdVYw}
The FOMC took a significant policy step at its last meeting (holding fed funds rate at exceptionally low levels through at least mid-2013) with Bernanke unlikely to push for immediate further policy easing at the Jackson Hole speech, thought he is likely to strive to keep his options open, perhaps even floating the idea of open-ended asset purchases.
List of potential options includes:
– Explicit guidance on a period for holding the Fed’s balance sheet at an expanded size
– More securities purchases or QE
– Increasing the average maturity of the Fed’s securities holdings
– Reducing the 25 basis points of interest currently paid to banks on their reserves
Jackson Preview {http://bit.ly/oFdVYw}
Bond market reaction post last Jackson summit and implications {http://bit.ly/qKXQAr}
HSBC Global Research