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FOMC Decision: Quick Take: Fed To Hike In December –

The Fed left rates unchanged but there are  reasons to see a hawkish hold. What’s next? Here is the opinion from CIBC:

Here is their view, courtesy of eFXnews:

A string of weak data releases in the lead up to today’s announcement likely removed any chance of a Fed rate hike. So it comes as no surprise then that the FOMC decided to keep interest rates unchanged  at their September meeting. That said,  with three officials dissenting, it appears that odds  are starting to tilt in favour of a rate hike.

The assessment of the economy contained in the statement  appears to be little changed from the previous one and a sentence indicating that the case for a rate increase has strengthened was added. Together, those factors suggest that the recent spate of soft economic releases are likely viewed as more transitory than not. While the statement and dissenters argue for more near-term hawkishness from the central bank than had been expected, the SEP favours a longer-term dovish view of the economy. The median of members now only sees two rate hikes next year, while the forecast for the longer-run neutral rate came down a tick to 2.9%.  We continue to view December as the most likely timing for the next rate hike, although that’s contingent on a rebound in economic data.

Overall, while the statement and dissents were more hawkish than expected, the dovishness contained in the SEP appear to be driving markets.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.