Fed Note:
Fed policy remains at the center of investment market focus, but the October meeting wasn’t expected to be a blockbuster one. It didn’t disappoint, as there were no changes, but did leave December open as a possibility.
The FOMC calendar was designed with eight formal meetings this year, half of which feature a press conference afterward—so about one press event per quarter. Major announcements and changes in policy aren’t expected in non-press conference months due to the high need for communication fine-tuning, avoidance of misunderstandings/misinterpretations and a proactive setting of future expectations. No doubt, any rate hike would be coupled with extremely accommodative language and tone describing the intended slow and gradual path for any future hikes—at least based on recent economic data and comments from officials.
The FOMC statement acknowledged some deceleration in economic metrics over the past month or so (much of which we’ve reported on via manufacturing surveys and the like)—this is usually taken as dovish by economists, since it perpetuates the need to keep easing intact for a longer period of time. Continue reading
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