Friday, October 9, 2015

FOMC minutes fails to clarify rate hike picture - NAB

FXStreet (Bali) - The FOMC minutes has failed to clarify whether the Fed is likely to be hiking before year end or later, notes NAB.

Key Quotes

"As is quite often the case – and with some increased divergence of views – you could read into the Minutes whatever you wanted."

"Initial wire headlines were a combination of the various mixed threads: “many members see lift-off conditions met this year”, “several members concerned about downside risks to the outlook” and “members viewed risks to outlook as nearly balanced”.

"All in all, the majority view is to expect that lift-off will happen in coming months – as we know from Yellen -but with plenty of caveats to hold off and wait."

"In that respect, low inflation remains a concern and the Fed is just not confident enough yet that inflation will head back to its 2% target over the medium term."

"One interesting snippet was a view from officials to let the jobless rate fall below full employment, not that this should be too surprising since according to the Fed’s pegging full employment in the low 5s/high 4s, they are already there."

"Inflation, EM volatility, net exports, and payrolls will be key. There is no more payrolls before the Oct 27-28 FOMC (announced early 29th our time), virtually ruling out lift-off then."
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