FOMC minutes today might cause some headlines – Rabobank

FXStreet (Barcelona) - The Rabobank Team comments that with the FOMC minutes set to give some clarification into what Fed means by ‘external developments’ and its impact on US inflation, the minutes could cause some headlines.

Key Quotes

“The minutes of the January FOMC meeting could cause some headlines. These minutes should especially give some clarification of the FOMC’s view regarding external developments, and the way that the developments in the global economy have impacted recent US inflation data. This in turn will determine how much longer the Fed can hold off a first rate hike.”

“Indeed, although ‘considerable time’ was removed in the FOMC’s January statement, the Committee did highlight the sharp fall in inflation, as well as inflation expectations.”

“Nonetheless, the central bank expects a gradual return to the target over the ‘medium term’. These last two words suggest that the FOMC members are starting to believe that it may take somewhat longer before they can start hiking rates.”

“Given the backdrop of stronger-than-expected disinflation we currently expect this first hike in 2015Q4”