|

FOMC minutes: a more robust discussion on inflation - Nomura

Analysts at Nomura offered a review of the FOMC minutes.

Key Quotes:

"The minutes from the 19-20 September FOMC meeting contained a more robust discussion on inflation but relatively little new information, especially in light of the numerous public statements by FOMC members since the meeting. The language in the minutes was consistent with a December hike, although a small group of members expressed significant concerns over this year’s underperformance in inflation. 

Regarding the next rate hike, the minutes described three camps on a December rate hike: "many" expecting a rate hike this year if the "medium" term outlook remain unchanged; "several others" conditioning a December rate hike on the degree of their "confidence" in the inflation outlook; and "a few" arguing to wait for confirmation that inflation is "clearly" on a path towards 2%. Altogether, the distribution of views is consistent with an additional rate hike in December. However, the “several other” group could lean towards the dovish camp that a December hike should be deferred for a while if inflation data comes in weaker than expected before the December FOMC meeting. Although we maintain our call for a December rate hike, we note that a high degree of uncertainty remains."

Author

Ross J Burland

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

More from Ross J Burland
Share:

Editor's Picks

EUR/USD stays weak near 1.1850 after dismal German ZEW data

EUR/USD remains in the red near 1.1850 in the European session on Tuesday. A broad US Dollar bullish consolidation combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February. 

GBP/USD holds losees near 1.3600 after weak UK jobs report

GBP/USD is holding moderate losses near the 1.3600 level in Tuesday's European trading. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month. This narrative keeps the Pound Sterling under bearish pressure. 

Gold pares intraday losses; keeps the red above $4,900 amid receding safe-haven demand

Gold (XAU/USD) attracts some follow-through selling for the second straight day and dives to over a one-week low, around the $4,858 area, heading into the European session on Tuesday. 

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months. 

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.