Fed to hold, but Statement may be more constructive - BBH
|Analysts at Brown Brothers Harriman explained that the Federal Reserve's two-day meeting concludes tomorrow.
Key Quotes:
"There is little doubt that it will stand pat. There is not press conference afterward, so the statement is the only thing investors will get.
The statement is important. We argue that the FOMC statement is the clearest expression of the views of the Fed's leadership. The minutes are more comprehensive they dilute the signal from the Fed's leadership, and it conflates the difference between voters and non-voters and between the Governors and regional Presidents.
The Federal Reserve was designed to concentrate power with the Governors. The passions of the local business would be checked by the Washington-based Governors. The regional presidents rotate voting. The NY Fed has a permanent vote on the FOMC. Four other regional presidents get to vote on the FOMC. The power struggle between the Republican Senate and the Democratic President has altered the balance of power at the Federal Reserve. There are two vacancies on the Board of Governors. This gives the regional presidents five votes, including the NY vote and there are five Governors."
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