FOMC: Do not expect change in the target range for the federal funds rate - Rabobank

At the FOMC meeting on October 31-November 1, Philip Marey, Senior US Strategist at Rabobank suggests that they do not expect the FOMC to change the target range for the federal funds rate, which currently stands at 1.00-1.25%.

Key Quotes

“Economic growth remained strong in Q3, despite the hurricanes. However, core inflation continues to fall. Nevertheless, the FOMC is still aiming for a third hike in December, as it has become model-dependent rather than data-dependent.”

“We expect core inflation to continue to fall short. Therefore, for now, we stick to our call for the next hike to be delayed to 2018.”

“However, if incoming data are not weak enough to deter the Fed from its intention to hike in December, we will shift our call.”