Analysts at Nomura explained that the August FOMC minutes were largely in line with our expectations on the near-term trajectory of policy, setting the stage for another rate hike in September, the third of 2018.
Key Quotes:
“However, the minutes included discussions on two longer-term topics: alternative monetary policies to increase the Committee’s tools at the zero lower bound (ZLB) and 2) the start of a longer-term discussion on the Fed’s implementation framework.
Further, the minutes provided more details on the FOMC’s assessment of the risk of escalation in trade disputes as well as wide-ranging tariffs while indicating that many participants’ economic outlook remains unchanged. We maintain that it is unlikely for the FOMC to react preemptively to estimated effects of possible trade actions by the US and trading partners. In addition, the minutes provided some hint of potential upcoming changes to the post-meeting statement.”
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