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October FOMC minutes preview – Nomura

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 18, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at Nomura, suggests that since the 27-28 October policy meeting, we have heard from a majority of FOMC members on their views on current economic conditions and monetary policy and there seems to be a tentative consensus growing around a December liftoff of short-term interest rates.

    Key Quotes

    “During her Congressional testimony, although Yellen stressed no decision has been made on the timing of liftoff, she did note that raising rates in a “timely fashion” is “a prudent thing to do.” Also in recent speeches, Vice Chair Fischer and New York Fed President Dudley argued that the US economy appears to be coping well with external headwinds and they are reasonably confident that growth and inflation will progress in line with the FOMC’s expectations.”

    “Other regional Fed presidents—both hawkish and dovish members of the Committee— saw the outlook evolving in a way where a December liftoff is likely. Hawks such as Bullard, Mester, and Lacker continued to argue that the economy can handle a rate hike in December. But the notable remarks came from the doves such as Rosengren and Evans, who did not oppose a December liftoff.”

    “In this context, the minutes to the 27-28 October FOMC meeting will be interesting to see how much consensus on the economic outlook and monetary policy was reached at the October meeting. (Note that with the exception of Yellen’s testimony, all the “fedspeak” noted above came after the strong employment report on 6 November.) Additionally, we will be reading the minutes for color on the economic outlook, the reasoning behind the change in forward guidance, discussions around the pace of tightening and balance sheet normalization.”
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