The Fed’s meeting minutes from the September meeting came out slightly more dovish than expected. Nevertheless, the FOMC remains on track to raise rates in December. This is the verdict according to the three opinions below:
Here is their view, courtesy of eFXnews:
USD: FOMC Minutes Didn’t Add Much To Dec Hike Call – CIBC
CIBC Research comments on today’s FOMC minutes from the September meeting:
“The Fed minutes couldn’t really add that much to the rate outlook, since we already have a “dot” forecast that shows that all but four FOMC members expect to hike before year end.
At that time, the Fed hadn’t seen much signs of a pick-up in wages, but “most” were expecting them ahead, so the recent upward revision to August wage inflation data (and the storm-affected further climb in September) wouldn’t have been much of a surprise.
Finally, remember that the composition of the FOMC will be changing in the quarters ahead, so today’s minutes might not reflect the views of the Fed’s composition a few quarters from now,” CIBC argues.
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USD: FOMC Minutes: Slightly Dovish But Not Enough To Change Outlook – SEB
SEB Research comments on today’s FOMC minutes from the September meeting:
“Our assessment of the minutes is that the message was slightly dovish but not enough to change our outlook for US monetary policy.
We know from the rate projections published along with the statement that 12 out of 16 meeting participants see at least one more hike in 2017. Since the September meeting, Fed communication has been hawkish although there has been a vocal dovish minority. In addition to the Fed’s communication and forecasts, as we argued recently in a Central Bank Insight the Fed is also set to become more hawkish in 2018.
We continue to expect that the Fed will deliver another rate hike in December and stick to our view that there will be three additional rate hikes in 2018,” SEB argues.
USD: FOMC Minutes: Nothing New Of Great Importance; Dec Hike Base Case – Danske
Danske Research comments on today’s FOMC minutes from the September meeting:
“In our view, there was nothing new of great importance in the FOMC minutes, as we already know the different positions among the FOMC members. This also explains why markets did not react to the minutes.
It remains our base case that the Fed hikes in December, as the core voting FOMC members put more weight on labour market data than current inflation data, although we agree with the dovish camp that low inflation may not be temporary due to low inflation expectations. It is difficult to say what happens next year, as we do not know who the next Fed chair is and who the Fed nominates for the vacant seats on the Board of Governors.
Our base case is right now two hikes. While market pricing for a December hike seems fair, markets still price in too few hikes next year,” Danske argues.
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