Back
29 Oct 2015
Little reason for FOMC to delay rate hike until 2016 - RBC
FXStreet (Córdoba) - Josh Nye, Economist at Royal Bank of Canada, explains that they expect a rate hike in December after yesterday's FOMC meeting
Key Quotes:
“There was little anticipation ahead of the latest meeting, given limited prospects for a rate hike, although the postmeeting policy statement likely provided more information than expected. The Committee upgraded its assessment of consumer spending and investment, dwelled little on the slowdown in employment growth, and altered its forward guidance to emphasize that a December hike remains on the table. These developments gave the statement a slightly more bullish tone compared with September”.
“With market volatility having normalized and job growth continuing at a pace that will reduce labour market slack, we see little reason for the FOMC to delay the first rate hike until 2016. While the changes in today’s policy statement were relatively limited, they seem to point to greater likelihood of a December liftoff. Barring any significant deterioration in the growth outlook or the return of market volatility, we expect the target range for the fed funds rate will be raised by 25 basis points on December 16, 2015.”
Key Quotes:
“There was little anticipation ahead of the latest meeting, given limited prospects for a rate hike, although the postmeeting policy statement likely provided more information than expected. The Committee upgraded its assessment of consumer spending and investment, dwelled little on the slowdown in employment growth, and altered its forward guidance to emphasize that a December hike remains on the table. These developments gave the statement a slightly more bullish tone compared with September”.
“With market volatility having normalized and job growth continuing at a pace that will reduce labour market slack, we see little reason for the FOMC to delay the first rate hike until 2016. While the changes in today’s policy statement were relatively limited, they seem to point to greater likelihood of a December liftoff. Barring any significant deterioration in the growth outlook or the return of market volatility, we expect the target range for the fed funds rate will be raised by 25 basis points on December 16, 2015.”