Fed Note:
As expected, the FOMC unanimously made no change in the fed funds target rate during the November meeting—leaving the level at 2.00-2.25%. Their formal statement offered few surprises, noting strength in underlying economic growth and labor markets.
In keeping with the quarterly pace of rate movements, fed funds futures peg the chances of a hike in December at over 80%. Many economists also expect 2-4 hikes during 2019, but this gets murkier, with risks to that base case including an intensification of trade tensions, which could cause some erosion to GDP growth and also raise inflation, as well as a later-cycle flattening in manufacturing and other areas. The Fed is no doubt cognizant (per their mentioning it) of the negative signals that a flat or inverted yield curve would send, but don’t claim to be overly concerned about this coming to pass.
The Fed dashboard remains little changed from the last meeting:
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