Five quick takes on the Fed

Capital Economics

The language added to today's statement that "near-term risks to the economic outlook have diminished" is a clear indication that a September rate hike might be coming... Otherwise, the statement was predictably more upbeat, reflecting the clear improvement in the incoming economic data since the mid-June meeting.

Overall, we still expect the Fed to raise rates at least once and probably twice this year, taking the fed funds target range to between 0.75% and 1.00% by year-end.

CIBC

"There's nothing here that points to Sept," they write, noting that they continue to call for a Dec hike. They believe officials are "feeling chastened after a series of flip-flops"

Exante

Jens Norvig on Bloomberg says September is "very much live"

MUFG

"Why do we think a September rate hike is coming? Well they inserted a new sentence above the one at the end of paragraph two, which finished off with saying they continue to closely monitor inflation and global economic and financial developments. Right above this, the new line insertion says: "Near-term risks to the economic outlook have diminished." If there is less risk, there is less downside to raising interest rates at a gradual and cautious pace. If they go in
September for the first time since last December, you can't be any more gradual and cautious than that. Get on with it is our view. We think Yellen will raise the curtain on a September move at Jackson Hole in August. The economy is better than Fed officials think. Rate hikes are coming. Bet on it."

Jefferies

"The tone of the policy statement was more optimistic about US economic prospects and, consequently, somewhat less dovish than the June 15 policy statement... as expected, however, there are no hints, nods or winks regarding the timing of the next rate hike. The Fed's continues to have an undefined timetable for the next rate hike in the normalization process. As expected, Esther George dissented in favor of a rate hike."

He adds that the "statement embodied no new information about the timing of the next rate hike in the normalization process, but leans less dovish than June by nature of the more optimistic assessment of the economy and a specific reference a diminution of near-term risks to the economy."