FOMC Minutes: Hikes on the Agenda of Each Meeting Now - Rabobank
FOMC Minutes: Hikes on the Agenda of Each Meeting Now - Rabobank
Philip Marey, Senior US Strategist at Rabobank, suggests that while the
recently released FOMC minutes confirm that there is a lot of
uncertainty in the Committee about the economic outlook, with risks
tilted to the downside, it is clear that hikes are on the agenda of each
meeting now.
Key Quotes
“We do not
think that so much has changed in the economy between the March meeting
and now that the March dot plot has lost its validity already. In fact,
in her speech last week Yellen tried to explain why the FOMC is taking a
gradual approach to begin with, and why two hikes were removed from the
dot plot between December and March.
What’s more, speeches by
other FOMC participants before and after Yellen’s confirm that most are
still thinking about hiking twice this year, including some notorious
doves. Therefore we stick to our call of two hikes in 2016, most likely
in June and December. From this point on, it would require a significant
deterioration in the US economic outlook for the FOMC participants to
remove more hikes from their anticipated trajectory for 2016.”
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