Weekly Economics Analysis by Lloyds TSB

After last week’s European central bank announcements, attention turns to Wednesday’s US FOMC meeting. We expect an unchanged 0-0.25% federal funds target range and for the policy statement to reiterate that this is likely to continue for an extended period.

FOMC meeting and BoE Inflation Report take centre stage

After last week’s European central bank announcements, attention turns to Wednesday’s US FOMC meeting. We expect an unchanged 0-0.25% federal funds target range and for the policy statement to reiterate that this is likely to continue for an extended period. The statement may also touch on the exit strategy from QE, although the question of timing is likely to remain open.

 The Bank of Japan also announces its policy decision, amid signs that economic conditions have stopped deteriorating. Elsewhere, Wednesday’s UK Inflation Report provides an opportunity for Governor Mervyn King to shed further light on the Bank’s decision to increase the size of its QErelated asset purchases. In the eurozone, the main data release is preliminary Q2 GDP, scheduled for Thursday.

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