Dennis Lockhart, Atlanta Fed President, said that it will soon be appropriate to
raise rates, given current conditions and his outlook views.
Speaking at
DeKalb Chamber of Commerce he said he expects the path of policy increases to be
relatively gradual or shallow, reflecting a cautious approach to the tightening
of financial conditions shaped by policy.
“In my opinion, the decision to
raise the bedrock policy rate, when and if it comes, should be seen as affirming
that the economic outlook is positive. I would hope the announcement effect
would bolster confidence in our economic future and contribute to the very
outcome I've forecasted as the outlook yields to reality”, Lockhart concluded.
According to Kim Chase, US Economist at BBVA the minutes revealed a dovish undertone. He warns that a rate hike is still not a done deal.
Key Quotes:
“October’s FOMC meeting statement was surprisingly hawkish, with the Fed successfully reeling in expectations for a potential rate hike by the end of this year. However, the meeting minutes reveal more dovish undertones and an intense ongoing debate within the Committee. “
“Markets may be pricing in a December rate hike following October’s hawkish FOMC statement and strong jobs report, but these meeting minutes remind us not to forget about the doves still playing the cautious card.”
“The FOMC wanted to reel in expectations for the possibility of a December rate hike, but now it seems that they have gotten more than what they asked for. Although this helps the Fed feel more confident that a rate hike at the end of the year won’t completely surprise markets, we still cannot completely rule out a delay to 1Q16.
“FOMC members remain sensitive to unexpected changes in incoming economic data, and any negative report could again push expectations past December.”
