The Federal Open Market Committee (FOMC) Meeting Minutes provides insight into the monetary policy decision making process. Analysts at Nomura have offered a preview of this on the 21 February US FOMC Meeting Minutes.
21 February, GKFX – The FOMC minutes from the 30-31 January meeting should provide additional color on what we perceived to be a marginally hawkish post-meeting statement (January FOMC Recap, Policy Watch, 31 January 2018).
21 February US FOMC Meeting Minutes
In particular, the minutes are likely to provide added context on the addition of the word “further” in two key sentences of the forward guidance paragraph of the statement. Moreover, the minutes may provide a rationale for other language changes, including an upgrade to the FOMC’s near-term inflation outlook.
The minutes will not, however, be timely enough to provide a view on the Committee’s reaction to recent financial market developments. Thus far, most FOMC participants who have commented publically on financial markets have indicated that the turbulence from the past few weeks has not fundamentally reshaped their medium-term outlook.
Rate Hike Expected
The combination of market unrest, a strong core CPI print for January and the recently-passed budget agreement to boost federal spending appears to be engendering more interest than usual in Chair Powell’s first public remarks on 28 February before Congress (10 am EST). In that sense, the January minutes may contain less information than usual given recent developments.
We continue to expect a rate hike at the upcoming 20-21 March meeting, followed by three additional hikes in 2018 (Jun, September and December) and two hikes in 2019 (March and September).
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