7 Jan 2016
FOMC minutes - bottom line - Nomura
FXStreet (Guatemala) - Analysts at Nomura explained that they continue to believe that the second rate hike is most likely to come in June, but March remains a close call.
Key Quotes:
"On one hand, recent comments certainly suggest that March remains in play. (Fischer and Williams both stated that it’s reasonable to see four rate hikes this year.) On the other hand, the data suggest that the economy is losing momentum heading into 2016.
As mentioned above, our Q4 GDP tracking estimate stands at 0.9%, well below any reasonable measure of potential GDP.
Also, it seems clear that the Committee wants to emphasize realized inflation more so than the outlook on inflation for subsequent rate hike and it’s hard to imagine that core PCE inflation will pick up substantially in the next two months.
As such, we believe that the FOMC is more likely to wait until June than raise rates in March."
Key Quotes:
"On one hand, recent comments certainly suggest that March remains in play. (Fischer and Williams both stated that it’s reasonable to see four rate hikes this year.) On the other hand, the data suggest that the economy is losing momentum heading into 2016.
As mentioned above, our Q4 GDP tracking estimate stands at 0.9%, well below any reasonable measure of potential GDP.
Also, it seems clear that the Committee wants to emphasize realized inflation more so than the outlook on inflation for subsequent rate hike and it’s hard to imagine that core PCE inflation will pick up substantially in the next two months.
As such, we believe that the FOMC is more likely to wait until June than raise rates in March."