At their December meeting the Federal Reserve's Federal Open Market Committee hiked rates
Which is becoming a bit of a habit in December. Grinches.
Anyway, on Wednesday we get the Minutes of that meeting
- Due at 1900GMT
What to watch for:
Goldman: We receive the December FOMC Minutes on Wednesday, which we will be watching for discussion of potential policy changes under the new administration, as well as the rationale behind the hawkish shift in thedot plot.
UBS: The December meeting minutes may reveal more colour on the rationale behind the evolution of the dot plot and the lack of a shift in economic forecasts. Our economists believe the latter is perhaps due to Fed officials taking a "wait and see" attitude regarding the impact of potential fiscal and other government policy changes. We maintain our view that the Fed will tighten via two rate hikes in 2017.
Barclays: We believed coming into the meeting that members would be reluctant to incorporate policy changes post election. However, despite saying that it is "far too early" to judge the effects of fiscal policy, Chair Yellen noted that "a few" members incorporated policy changes into their forecast. These adjustments did not change the range of member forecasts and we look to the minutes for clarity on how potential policy changes may have influenced the outlook. In addition, we look to the discussion to judge whether the FOMC sees fiscal stimulus as likely to substantively boost potential output. Yellen took a dim view on this possibility and hence is likely to advocate faster rate hikes in response to a large increase in spending.
