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Jonas Goltermann, Developed Market Economist at ING, the Fed has upgraded its assessment of business fixed investment to say it has “grown strongly”, reflecting  the latest data for 3Q which suggests policymakers remain content with the way the economy is evolving, and will stick to their current policy stance of “gradual increases” in the policy rate.

Key Quotes

“Near-term momentum in the US economy remains strong, with 3Q  GDP coming in at 3.5% QoQ annualised  in the advance reading.”

“The recent volatility in equity markets looks unlikely to derail the Fed’s plans – after all, the more severe volatility episode back in February didn’t affect the March hike, and equity markets appear to have regained their poise, at least for now.”

“All this suggests further interest rate rises are on the way. We expect another 25 basis point  hike in December, and three more in 2019, in line with the Fed’s ‘dot plot’. Recent speeches by Fed governors, including newly appointed vice-chair Richard Clarida, suggests the FOMC remains in an optimistic mood.”