FOMC minutes: what to expect?
On Wednesday market attention is focused on the release of the Federal Reserve October meeting minutes at 19:00 GMT. The major question is: WHEN WILL THE FED HIKE RATES?
Policy statement from the October 29 meeting was less dovish than expected as the Fed finished QE and upgraded employment assessment, noting the labor underutilization had diminished.
At the same time, with the average inflation staying far below the Fed’s 2% target on the back of falling energy prices, the need for an immediate rate hike has lowered. Even the most hawkish FOMC members could have calmed down. This is the major risk for the USD bulls today, in my view.
Let me remind you that the US stock market rallied its most in 2014 following the September minutes release. Unexpectedly dovish minutes increased expectations for low rates to stay for longer.