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21 May 2015
FOMC Minutes: No obvious change in policy course - Nomura
FXStreet (Bali) - Lewis Alexander, North American Economist at Nomura, notes that the minutes from the April FOMC meeting did not contain any obvious change in the likely course of US monetary policy.
Key Quotes
"Both the Federal Reserve staff and FOMC participants acknowledged that the economy slowed notably in the first quarter. There was a detailed discussion of whether the slowdown was likely to be temporary or might persist. A potential drag from a strong dollar was discussed."
"FOMC participants noted the recent pattern of weak activity (after seasonal adjustment) in the first quarter. In the end, only a “few” participants indicated that their concerns about downside risks had increased since the March meeting, and “most” participants continued to see the risks for growth and the labor markets as balanced."
"As expected, FOMC participants said that in the future they would consider changes to their targets for interest rates on a “meeting-by-meeting” basis.
FOMC participants offered a “range of views” on when economic conditions were likely to warrant the first increase in short-term interest rates. A “few” anticipated that this could come as early as the next meeting. However, "many" thought it unlikely that the data would indicate it was time in June."
"The bottom line is that the minutes of the April FOMC meeting did not signal any obvious change in the likely course of US monetary policy. On Friday, Fed Chair Yellen will speak on the “U.S. Economic Outlook” in Providence, Rhode Island. We suspect that she will largely reiterate themes from her last speech and from the recent statements by the FOMC. As such, we are not expecting Yellen to signal any change of course either."
Key Quotes
"Both the Federal Reserve staff and FOMC participants acknowledged that the economy slowed notably in the first quarter. There was a detailed discussion of whether the slowdown was likely to be temporary or might persist. A potential drag from a strong dollar was discussed."
"FOMC participants noted the recent pattern of weak activity (after seasonal adjustment) in the first quarter. In the end, only a “few” participants indicated that their concerns about downside risks had increased since the March meeting, and “most” participants continued to see the risks for growth and the labor markets as balanced."
"As expected, FOMC participants said that in the future they would consider changes to their targets for interest rates on a “meeting-by-meeting” basis.
FOMC participants offered a “range of views” on when economic conditions were likely to warrant the first increase in short-term interest rates. A “few” anticipated that this could come as early as the next meeting. However, "many" thought it unlikely that the data would indicate it was time in June."
"The bottom line is that the minutes of the April FOMC meeting did not signal any obvious change in the likely course of US monetary policy. On Friday, Fed Chair Yellen will speak on the “U.S. Economic Outlook” in Providence, Rhode Island. We suspect that she will largely reiterate themes from her last speech and from the recent statements by the FOMC. As such, we are not expecting Yellen to signal any change of course either."