Fed: Further rate hikes still on the cards – UOB

Alvin Liew, Senior Economist at UOB Group, assessed the recent release of the FOMC minutes.

Key Quotes

“The main takeaway from the latest minutes of the 25/26 Sep 2018 FOMC meeting is the Federal Reserve remains on course to hike rates further”.

“The Fed was broadly and visibly more confident about the US economy as we note the numerous times positive words like “strong”, “high” and “solid” appeared in its assessment of the economy while inflation is widely expected to achieve “the Committee's symmetric 2 percent objective on a sustained basis”.

“The latest minutes further cements our expectations for another hike this year in the 18/19 Dec FOMC to bring the FFTR range to 2.25%-2.50% by end-2018. We also maintain our 2019 rate hike expectation at three 25bps hikes which implies that we expect the Fed to exceed their long run FFTR of 3.0% by mid-2019”.