18 Dec 2014
December FOMC meeting recap – Nomura
FXStreet (Barcelona) - Research Analysts at Nomura share the key points of the FOMC meeting, and keeping their forecast for rate adjustment intact, anticipating the pace of the liftoff to be 100bp per year.
Key Quotes
“The FOMC delivered a somewhat more dovish message than we had expected. First, the Committee‟s statement reiterated its expectation that the first rate hike is still a “considerable time” away. The FOMC added, however, other language – suggesting that it will be “patient” in removing accommodation – that we had expected to replace the “considerable time” judgment. Second, the participants lowered their interest rate forecasts, although their new forecasts are still well above market pricing.”
“Last, the FOMC statement and Yellen‟s post meeting comments indicated that, in the wake of the sharp declines in oil process, there is greater uncertainty about the outlook for inflation in coming quarters.”
“The Committee and Yellen stressed that the US economy continues to perform well. While noting that she and the rest of the Committee are “attentive” to developments abroad, Yellen indicated that those concerns have not, as yet, adversely affected their outlook.”
“Today‟s developments did not change our forecast for interest rate adjustment. We still think that FOMC meetings scheduled for June and September are the most likely options for liftoff, and September is somewhat more likely than June.”
“Moreover, we expect the pace of adjustment following liftoff to be about 100bp per year.”
Key Quotes
“The FOMC delivered a somewhat more dovish message than we had expected. First, the Committee‟s statement reiterated its expectation that the first rate hike is still a “considerable time” away. The FOMC added, however, other language – suggesting that it will be “patient” in removing accommodation – that we had expected to replace the “considerable time” judgment. Second, the participants lowered their interest rate forecasts, although their new forecasts are still well above market pricing.”
“Last, the FOMC statement and Yellen‟s post meeting comments indicated that, in the wake of the sharp declines in oil process, there is greater uncertainty about the outlook for inflation in coming quarters.”
“The Committee and Yellen stressed that the US economy continues to perform well. While noting that she and the rest of the Committee are “attentive” to developments abroad, Yellen indicated that those concerns have not, as yet, adversely affected their outlook.”
“Today‟s developments did not change our forecast for interest rate adjustment. We still think that FOMC meetings scheduled for June and September are the most likely options for liftoff, and September is somewhat more likely than June.”
“Moreover, we expect the pace of adjustment following liftoff to be about 100bp per year.”