Matt Simpson, CFTe, MSTA
CityIndex
A snapshot view of FOMC statement and press conference.
- Economic activity is expanding at a moderate pace
- On balance, labor market conditions improved somewhat further
- However, significant underutilization of labor resources remains
- Asset purchases are not on a preset course
- Beginning in October, add $5 billion per month rather than $10 billion per month of mortgage backed securities
- Add $10 billion per month rather than $15 billion per month of longer-term Treasury securities
- Assesment of rates and objectives of maximum employment and 2% inflation will include easures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments
- Concern Raised That 'Considerable Time' Could Be Seen As Calendar-Linked, Not Data-Linked
- Most officials expect inflation to gradually rise to 2%
- Fed Officials more concerned about overseas growth and srong Dollar
- A few members expressed reservations about characterizing labor underuse as 'significant'
- Many members still saw significant slack in labor markets
- Generally agreed forward guidance changes will present communication challenges
- Number of officials noted forward guidance change might be misinterpreted
- Emphasized forward guidance is data-dependent, not mechanical
- Some saw guidance as appropriate because prudent to err on side of patience
- Concern Raised That 'Considerable Time' Could Be Seen As Calendar-Linked, Not Data-Linked
- Most Indicated Preference For Clarifying Data-Dependence Of Guidance
- Several officials thought current forward guidance points to later liftoff than was likely
- Officials in September debated forward guidance
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