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As expected, the Federal Reserve left interest rates unchanged at 2.00-2.25% after the November meeting. According to National Bank of Canada’s analysts, Paul-André Pinsonnault and Krishen Rangasamy, it will take a significant deterioration of economic data, financial conditions, or the trade environment to stop the FOMC from raising in December.  

Key Quotes:

“The Fed’s statement was largely unchanged from last September with the exception of a slightly less buoyant view of business investment which “has moderated from its rapid pace earlier in the year”.

“The Fed’s statement did nothing to alter market expectations of a change in the pace of future monetary policy tightening. It will take a significant deterioration of economic data, financial conditions, or the trade environment to stop the FOMC from delivering an expected rate hike in December.”

“While today’s statement did not include much information, the minutes of the meeting (due on November 29th) will be scrutinized for clues about the Fed’s views on important technical aspects of monetary policy implementation over the longer term, e.g. balance sheet, interest on reserves. Note that this was the last rate setting meeting without a press conference.”