16 Nov 2015
FOMC minutes to be star event of the week for Greenback - RBS
FXStreet (Delhi) – Brian Daingerfield, FX Trading Strategist at RBS, suggests that the October FOMC meeting minutes will enlighten the discussion surrounding the Fed rate hike assumptions and the recent change in the language.
Key Quotes
“In the October FOMC statement, the Fed made two meaningful changes in its statement that leaned in the hawkish direction. Primarily, it altered the language to note specifically it will consider raising the funds rate at its next meeting. Second, the Fed removed a phrase that it had added to the September statement, which said "recent global economic and financial developments may restrain economic activity somewhat and are likely to put downward pressure on inflation in the near term."
“The discussion of why the FOMC removed the key phrase on global economic and financial developments may be key, as it is likely that some members still feel that risks to the outlook emanating from abroad remain. The FOMC may have felt more secure about the global outlook after policy easing by the PBoC and a strong signal of new accommodation from the ECB.”
“In the end, the core message that was given in the statement – that a rate hike in December is a live possibility should the data continue to improve - should remain in place. Remember, these minutes pertain to a meeting that took place before the FOMC saw the strong October employment report.”
Key Quotes
“In the October FOMC statement, the Fed made two meaningful changes in its statement that leaned in the hawkish direction. Primarily, it altered the language to note specifically it will consider raising the funds rate at its next meeting. Second, the Fed removed a phrase that it had added to the September statement, which said "recent global economic and financial developments may restrain economic activity somewhat and are likely to put downward pressure on inflation in the near term."
“The discussion of why the FOMC removed the key phrase on global economic and financial developments may be key, as it is likely that some members still feel that risks to the outlook emanating from abroad remain. The FOMC may have felt more secure about the global outlook after policy easing by the PBoC and a strong signal of new accommodation from the ECB.”
“In the end, the core message that was given in the statement – that a rate hike in December is a live possibility should the data continue to improve - should remain in place. Remember, these minutes pertain to a meeting that took place before the FOMC saw the strong October employment report.”