Analysts at ANZ explained that reflecting on the recent run of solid US data, they expect the FOMC statement on Wednesday to reflect continuing confidence in the Fed’s assessment of solid growth, full employment and normalising inflation. 

Key Quotes:

“Monetary policy has been successful recently in guiding the economy to the Fed’s statutory objectives and there is no reason to expect a departure from current guidance.”

“We continue to look for a 25 bps rise in the IOER to 2.0% in June and fundamentals point to a resumption of the upwards trend towards higher bond yields soon.”

“That said, markets will continue to have an eye on US-EU metal tariffs and Chinese-US trade talks so some defensive positioning may continue in the short term.”

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