FOMC minutes concluded: doubts are increasing - Rabobank

Analysts at Rabobank offered their conclusions for the FOMC minutes.

Key Quotes:

"The minutes support our view that the FOMC still wants to squeeze in a rate hike before the end of the year, but is in no hurry. The weak GDP growth figure for Q2 has diminished the probability of a September hike, which was already low due to the lack of consensus at the July meeting. The November meeting takes place a week before the elections, which would make the first hike since December 2015 unlikely. That leaves the December meeting as the most feasible option for a rate hike.

However, our call for December implies that the risk of a delay until next year is substantial. Satisfying the three conditions (for GDP growth, the labor market, and inflation) for a hike simultaneously has been a challenge this year.

In fact, a few more setbacks could even force the FOMC to take a (formal) pause in its ‘hiking cycle’ altogether. Note that recent remarks by the San Francisco Fed’s John Williams show that doubts about the current approach are increasing."