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7 Jan 2015
FOMC minutes analyzed: First rate hike 2Q 2015? - ING
FXStreet (Barcelona) - Rob Carnell, analyst at ING Bank NV noted the FOMC minutes and forecasts a rate hike as soon as 2Q 2015.
Key Quotes:
“The minutes of the December FOMC meeting confirm the relatively buoyant tone of that meeting’s FOMC statement, and also the subsequent press briefing given by Chair Yellen".
“The minutes reveal that the committee saw the risks to growth and the labour market as being nearly balanced, and far from being problematic, the committee felt that the decline in oil prices was positive both for the US domestic economy, and on the whole, for the overseas economy”.
“In terms of the timing of the first rate hike, there was a little discussion that the use of the word “patient", expressed as meaning no rate hike for "at least" 2 meetings, unhelpfully ruled out the possibility of an earlier hike if necessary, though the balancing argument for later hikes under weaker conditions was also made, and there was no bias suggested".
"All in all, the minutes support our recent move to bring forward our forecast for the first rate hike to 2Q15, and for the range at the end of the year to be 75-100bp - up from 50-75bp. This is in line with market expectations, but given what the Fed said about them, even this might be a bit low”.
Key Quotes:
“The minutes of the December FOMC meeting confirm the relatively buoyant tone of that meeting’s FOMC statement, and also the subsequent press briefing given by Chair Yellen".
“The minutes reveal that the committee saw the risks to growth and the labour market as being nearly balanced, and far from being problematic, the committee felt that the decline in oil prices was positive both for the US domestic economy, and on the whole, for the overseas economy”.
“In terms of the timing of the first rate hike, there was a little discussion that the use of the word “patient", expressed as meaning no rate hike for "at least" 2 meetings, unhelpfully ruled out the possibility of an earlier hike if necessary, though the balancing argument for later hikes under weaker conditions was also made, and there was no bias suggested".
"All in all, the minutes support our recent move to bring forward our forecast for the first rate hike to 2Q15, and for the range at the end of the year to be 75-100bp - up from 50-75bp. This is in line with market expectations, but given what the Fed said about them, even this might be a bit low”.