Instant Analysis of Today’s December FOMC Statement
- FOMC is getting serious about raising the Fed funds target rate in 2015
- Yellen says liftoff could happen as soon as April 2015- though still data dependent
- Dot-plot remains more hawkish than futures market expectations and FOMC statement
- Three Dissents: 2 Hawks and 1 Dove (All the dissenters leave the FOMC next year)
- Fractious FOMC hedges its bets with statement– pleases and confuses everyone
- Almost, but not quite, gets rid of “considerable time” language
- Keeps “considerable time” language in statement takes it out of forward guidance
- Replaces “considerable time” with “the Fed can be patient” in forward guidance
- Yellen says there has been “no change in policy guidance”
- Upgrades assessment of current labor market conditions
- Inflation decline still seen as transitory- monitoring inflation developments closely
- Market jumps- S&P 500 +2.0%, 10-Yr Treasury +7.5 bps to 2.13%, USD strengthens
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Tags: economy