Sound Bites: FOMC More Optimistic, But Bernanke Open to Further Stimulus
Statement: Retains late 2014 target for interest-rate hikes. US economy to “pick up gradually” after more quarters of “moderate” growth.
Forecasts: Raises growth and PCE inflation forecasts for 2012-2014 period, more optimistic about unemployment.
Bernanke press conference: Fed is “prepared to do more,” including balance-sheet increases.
Statements from European politicians, policymakers:
French presidential frontrunner François Hollande: Will not ratify fiscal pact without changes if elected President.
ECB President Mario Draghi:Europe needs a “growth pact” to complement “fiscal pact.”
German Chancellor Angela Merkel:Supports growth policies in the form of “sustainable initiatives.”
European PMI reports:
PMI Flash Manufacturing gauges decline for Eurozone, Germany, and France.
Eurozone Composite PMI falls 1.9 points to 47.4.
German Services PMI ticks higher, while French Services PMI drops 3.7 points to 46.4.
Eurozone may enter recession.
HSBC/Markit Flash China Manufacturing PMI:
Gauge moves higher from 48.3 to 49.1. Key variable such as output remain in contraction. More policy loosening – both the fiscal and monetary – expected in 2Q.
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