According to Nomura's North American Economics Team, today’s minutes reinforce their view for three hikes in 2018, with the first expected in March.

Key Quotes

Compared to the minutes from the September and October-November meetings, the December FOMC meeting minutes released today contained broadly similar discussions on inflation.

Where the December minutes differed was a more robust debate about the effects of tax policy, with many participants expecting tax cuts to increase growth modestly next year.

Additionally, the minutes contained some debate about the flattening of the yield curve with a general agreement among participants that it was not a cause for concern at the moment.

Given the FOMC’s improved outlook for output, of which taxes are one source, little change in the inflation outlook, and the generally positive economic news since the December meeting, today’s minutes reinforce our call for three hikes in 2018, with the first expected in March.

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