Flash: Fed likely to be patient on QE tapering decision - DBS Group

FXstreet.com (Barcelona) - DBS Group analysts believe that regarding QE3, the Fed is likely to be patient in deciding if it should increase or decrease asset purchases.

They feel that in their view, market expectations for an imminent tapering are unwarranted. They add that separately, according to the US Treasury Department, US lawmakers have until the Labor Day holiday (September 2) to lift the federal debt limit. The team write, “The Treasury reckons that by then, it would have exhausted the extraordinary measures to keep paying the government bills, including bond payments. We remain mindful that this presents an event risk that could hurt the US dollar. The last thing the Fed wants is higher government bond yields reflecting a weakening in America’s credit standing.”