Highlights of the FOMC minutes from the Fed meeting on Dec 16-17:
- Officials saw rate rise unlikely before April
- Most participants saw no clear evidence of a broad-based acceleration in wages
- Most through reference to ‘patience’ indicated FOMC unlikely to hike for at least next couple of meetings
- Referenced previous guidance in statement to avoid misinterpretation about a change in policy
- Normalization may begin when core inflation nears current levels, through with confidence that inflation will move toward target over time
- Participants emphasized keeping accommodation in place for a time after first rate increase
- Downside international risks “nearly balanced” with upside
- Risk to int’l outlook could be serious “if foreign policy responses were insufficient”
- Full text
The kneejerk was whippy but the US dollar gained around 20 pips across the board but gave it back quickly.
The comment on wages isn’t getting much attention but it’s the only thing that stands out to me initially. It sounds dovish and the overall takeaway might be that whether hikes come in June or July, the pace of hiking will be slow.
