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Fed should end QE at October meeting - TD Securities

FXStreet (Łódź) - Millan L. Mulraine, Deputy Head, US Research & Strategy at TD Securities expects the FOMC to finalize its bond buying program at the monetary policy meeting next week.

Key quotes

"(The Fed is) setting the stage for the next phase of the monetary policy normalization process."

"Despite the end of the QE3 program, the overall tone of the communiqué should feel dovish as the Fed counters the implied tightening in monetary conditions resulting from the strong dollar and lean against the potential fallout from the current global growth slowdown and disinflationary impulse."

"The underlying message of the forward guidance framework should remain intact, though the 'considerable time' reference could be refined to make it state-dependent."

"There is the potential for the risk assessment on the outlook for growth and inflation to be downgraded slightly, reflecting the fallout from the strong dollar and weaker global recovery."

"A change in this direction will be interpreted as an indirect signal of a shift in the perceived start to rate hikes into the latter half of 2015."

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