Expectations for the Federal Open Market Committee minutes due Wednesday US time
- The Fed remains constructive on the economic outlook and has signaled its intent to engineer a soft-landing by overshooting the long-term neutral rate. Recent Fed speeches have been consistent with that message, which should be reiterated by speakers this week and the FOMC minutes.
- The September FOMC meeting held few surprises as the Committee raised the federal funds target range 25bp to 2.00-2.25%, the third hike of 2018.
- However, the minutes will likely provide important context for some of the decisions the Committee made in September, including the choice of dropping the “accommodative” language in the post-meeting statement.
- Recent FOMC meeting minutes have been more interesting than expected, highlighting longer-term topics such as alternate monetary policy frameworks and the balance sheet. We expect the minutes for the September meeting to emphasize the Committee’s expectation of another rate hike in December, the fourth of 2018. In addition, we will pay particular attention to the discussion around the appropriate path of policy in 2019, given the dispersion in participants’ forecasts, along with discussions on the neutral rate and whether a restrictive monetary stance will be appropriate to slow the economy.
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