FXStreet (Delhi) – Research Team at RBC Capital Markets, suggests that as the Fed mantra goes from timing to pace, how the committee defines “gradual” has moved into focus. Key Quotes “Cleveland Fed President Mester (a voter in 2016) offered up in her latest musings that the Fed dots (in the summary of economic projections) are the best guide for gauging the anticipated path of tightening. Atlanta Fed President Lockhart followed up by highlighting that he expects rate hikes to occur, but “not every meeting.” Both sentiments are quite consistent when we consider what the dots have priced in. Indeed, if one takes the dots at face value they augur for a hike in Dec followed by a 25bp increase at every other meeting in 2016. They also suggest an additional 125bp of tightening in 2017. Thus, the Fed’s current base case is for a rate hike at every other meeting is consistent with the latest characterization of “gradual” from both Mester (a hawk) and Lockhart (a dove). The bottom line is the FF market remains priced for a much shallower Fed path— practically expecting one rate hike per half year through the end of 2017.” For more information, read our latest forex news.