German government bonds are opening higher Thursday following overnight gains in USTs after the Federal Reserve indicated that rates will remain “lower-for-longer”. The FOMC statement said, “To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee expects to
maintain a highly accommodative stance for monetary policy.” “In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.” The committee had previously said it expected to keep the funds rate that low ’til at least mid-2013. In addition, the FOMC said it “expects to maintain a highly accommodative stance for monetary policy.” Attention turns to Italy CTZ & linker auctions for up to E5.0bln. The US sells 7-year Notes for $29.0bln.
EasyForexNews Research Team