FOMC: Expect 25bp federal funds rate rise at the 13-14 December meeting - HSBC

Ryan Wang, Economist at HSBC, notes that the November FOMC minutes show that the policymakers had just about made up their minds about a prospective increase in the federal funds rate in December.

Key Quotes                           

“The minutes noted that "it could well become appropriate to raise the target range for the federal funds rate relatively soon." We expect the FOMC to raise the federal funds rate by 25bp at the 13-14 December meeting. The November minutes also described a staff briefing and a discussion about the Fed's longer-run policy framework, including possible future changes to the size and composition of the Fed's balance sheet. We expect two additional 25bp rate increases in 2017, followed by one more 25bp increase in 2018. We expect that any move by the FOMC to allow its balance sheet to shrink will likely come in 2018 or later.”