HALISTER1: FOMC Minutes’ ‘Surprise’ Was No Explanation for Lower Dots: UBS

FOMC Minutes’ ‘Surprise’ Was No Explanation for Lower Dots: UBS

(Bloomberg) -- While FOMC had many reasons for caution at June 14-15 mtg, minutes of that gathering contain “no great explanation for the lower long-run dots,” UBS economists Drew Matus, Maury Harris, Samuel Coffin and Dave Liang write in note.
  • Many on FOMC said so-called neutral rate might be held down by factors such as slow productivity growth and demographic trends, though such influences “have been in place for a while”
  • Sharp cut in 2018 yr-end median rate forecast might be explained by support of several on FOMC for gradual policy adjustments to better gauge effects on economy
  • Still, “none of this seemed like a complete explanation for dragging down the medium-to-longer-term funds rate projections”
  • UBS sticks with call for next rate hike in Dec.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Drew Matus (UBS Asset Management Japan Ltd)
Maury Harris (UBS Asset Management Japan Ltd)
Samuel Coffin (UBS Global Asset Management Japan Ltd)
David Liang (UBS Securities LLC)

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