Bank of the West: Instant Analysis of Today’s FOMC Decision

Instant Analysis of Today’s September FOMC Meeting

  • FOMC Delays – no interest rate hike in September, still planning one this year
  • Cites recent global economic and financial developments
  • Could restrain economic activity and put further downward pressure on inflation
  • FOMC scales back median rate hike projections for 2015, 2016 and 2017 by 0.25%
  • Almost a quarter of FOMC participants now see the first rate hike in 2016 or 2017
  • Lowers GDP and Inflation forecasts a bit for 2016 and 2017
  • Unemployment rate forecast for 2015, 2016, and 2017 lowered by 0.3 to 0.2pct
  • Long-run Fed Funds rate median drops to 3.5% from 3.8% at June meeting
  • Inflation expected to remain low over the near-term
  • PCE-core not back to 2.0% target until 2018
  • Market reaction- S&P 500 +1.3%, 10-Yr Treasury at 2.21% down 8 bps, USD weakens

Click here to read the full analysis: Instant Analysis of Today’s FOMC Decision