Nov FOMC review: Forward guidance was modestly tweaked - RBS

Dhwani Mehta FXStreet

Analysts at RBS explained in their review of the latest FOMC decision that the Fed provided no hints on a Dec Fed rate hike, but only made a slight change in its forward guidance policy.

Key Quotes:

“At today’s meeting the FOMC left the funds rate unchanged (as universally expected). The FOMC made few changes to the policy statement.”

“The Fed made an obvious effort (ahead of the election) to keep the changes in its policy statement as inconsequential as possible”.

The balance of risks assessment was left intact (“Near-term risks to the economic outlook appear roughly balanced”), while the forward policy guidance was modestly tweaked. As we expected, the statement indicated that the case for a rate hike has “continued to strengthen”, but they are awaiting “some” further evidence that they are meeting their objectives before proceeding with another hike (our emphasis added).

“In September, the statement said “The Committee judges that the case for an increase in the federal funds rate has strengthened but decided, for the time being, to wait for further evidence of continued progress toward its objectives.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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