Fed minutes: Inflation was likely a major topic of discussion at Sept meeting - HSBC

Analysts at HSBC offer a brief preview on what to expect from the minutes of the FOMC Sept meeting due to be published at 1800 GMT tonight.

Key Quotes:

“The FOMC announced in September that it would initiate its balance sheet normalisation programme in October, as described in the June 2017 addendum to the committee's "Policy Nomalization Principles and Plans".

The operational parameters of the programme had been communicated to financial markets in advance and did not come as a surprise.

We will look through the September minutes to see if there was any further discussion regarding the expected impact of balance sheet disinvestment.

Inflation was likely a major topic of discussion at the September FOMC meeting. In the conference following the meeting and in a subsequent speech, Fed Chair Janet Yellen noted that low inflation this year, despite a substantial improvement in labour market conditions, created uncertainty for monetary policymakers. In the end, the Chair concluded that low inflation may be "transitory" and that it had not persisted long enough to negate the need for gradual policy tightening. However, some other FOMC policymakers have indicated a preference for allowing inflation to pick up before raising policy interest rates any further.

The FOMC minutes are likely to show a range of views on inflation, financial stability, and the implications for policy.”