Halister News

(Bloomberg) -- While FOMC will probably wait until December to hike rates, “a surprise rate increase next week is not out of the question,” Capital Economics economist Paul Ashworth writes in note.

• “Reading between the lines” of September meeting minutes, it wouldn’t require much more progress to persuade Fed “centrists” to join hawks and vote for a rate increase
• Until recently, Capital Economics would have said that uncertainty about presidential election “all but ruled out” a hike next week
  • Fed officials may now have enough confidence to act with Hillary Clinton so far ahead in polls and markets taking election in stride
• November move may be “attractive option” for two reasons
  • It would allow central bank to demonstrate political independence by hiking ahead of an election
  • Also would “kill” the perception that Fed only acts at meetings followed by press conferences