BNP reckon the Minutes from the July FOMC meeting (unleashed early last night) severely damaged the chances of rate lift-off in September
"The Committee is increasingly convinced that the labour market is near or very close to where it needs to be to justify liftoff, but not confident on the inflation outlook. The subsequent Chinese devaluation and weak commodity prices will not have helped the Committee's confidence in their inflation outlook," BNPP notes.
"The minutes reinforce our own confidence in a December rate hike, with September looking a long shot with only a 10% to 20% chance. The Fed's discussion of reinvestment policy in July supports our long-held view that it will be sensible to smooth out the balance sheet run-off," BNPP projects.
