18 Feb 2016
Fed to hike twice after June - Rabobank
Analysts at Rabobank explained that the minutes published today reflect a debate among a diverse group of FOMC participants that took place at the end of January.
Key Quotes:
"Since then we have seen Fed Chair Janet Yellen testify before Congress on February 10-11. While she acknowledged the uncertainty and downside risks, she did seem defiant and made her case for a continuation of the hiking cycle this year. This suggests that some of the stronger reservations expressed in the minutes are more reflective of the doves who already thought the decision to hike in December was a close call, than of the core around the Fed Chair.
All’n all, these minutes support our view that the Fed still intends to hike this year, albeit even more gradual than they anticipated in December. We expect two hikes at most this year, and not before June. In March, we are likely to see a downward revision of the dot plot."
Key Quotes:
"Since then we have seen Fed Chair Janet Yellen testify before Congress on February 10-11. While she acknowledged the uncertainty and downside risks, she did seem defiant and made her case for a continuation of the hiking cycle this year. This suggests that some of the stronger reservations expressed in the minutes are more reflective of the doves who already thought the decision to hike in December was a close call, than of the core around the Fed Chair.
All’n all, these minutes support our view that the Fed still intends to hike this year, albeit even more gradual than they anticipated in December. We expect two hikes at most this year, and not before June. In March, we are likely to see a downward revision of the dot plot."