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Growth is moderate, the labour market is strong, and risks to the outlook are more balanced. Thus, rates are likely to remain unchanged for ‘a time’, according to analysts at Nordea.

Key quotes

“There are still no signs of monetary policy easing ahead, although the FOMC’s bias remains firmly skewed towards more easing, and seemingly still not a lot of disagreement among FOMC members.”

“Markets were pricing 30bp of rate cuts during this year at the time of the FOMC meeting, according to the minutes, but comprising central expectations of no policy changes and a clear bias towards cuts should downside risks to the economy materialise.”

“Two elements of the review of the monetary policy strategy was discussed. The potential use of ranges around the inflation target and the interaction between monetary policy and financial stability.”

“Financial stability seems to be gaining more and more attention and the trade-off between low rates and the potential building of financial stability risks was discussed, albeit without any firm conclusion.”