FXStreet (Córdoba) – James Knightley, Senior Economist at ING, points out that there were a few but significant changes in the statement.
Key Quotes:
“The Federal Reserve has played it safe and left monetary policy unchanged. Jeffrey Lacker remains the only committee member voting for an immediate 25bp rate rise.”
“The changes to the accompanying statement are small in number, but reasonably significant. On the dovish side, the Fed acknowledges that “the pace of jobs growth has slowed” versus being viewed as “solid” in September. However, the rest of the statement seems to try and put the most positive spin possible.”
“They have also removed three lines about global risks possibly restraining economic activity and depressing inflation. This seems a remarkable turnaround. Furthermore, the statement specifically adds that “in determining whether it will be appropriate to raise the target range at its next meeting…” This suggests that the more hawkish element will be pushing hard for a December move should the data come in reasonably firm.”
“We would probable need to see 200k plus readings in that and the November report and unemployment breaking 5% to realistically shift thinking. However, there may be more support for the hawks from the CPI reports.”
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