Analysts Eye Rate Cut Pushback In Minutes (3/3)

Some sell-side views on what to watch for in the December minutes:

• Deutsche Bank: “we will be looking for any context around the Fed’s dovish pivot at that meeting. Our perspective is that this pivot was motivated primarily by a surprising moderation in inflation that, in turn, risked policy tightening too quickly.”
• ING: “should shed some light on the reasoning behind the dovish revision of the Dot Plot. Given the strong dovish reception by the market after the December Fed announcement, there is a risk of the minutes preventing further dovish bets as some conditionality (in terms of economic data developments) for easing policy emerges in the minutes.”
• Scotiabank: “Powell did intimate that the minutes would contain a further discussion on when to cut when he was asked during his recent press conference about when it will begin to become appropriate to begin easing and responded with “That was a discussion point in our meeting today.” Since the minutes recap the discussion, they are very likely to expand upon the dialogue. I would expect the same diverse range of views as reflected in the diverse array of dots for next year…One key may be reference to the breadth of support against prematurely easing monetary policy using the Fed’ language that connotes frequency of citation (none, one, a couple, a few, some, several, many, most, generally all etc).”
• TD: “All in all, while Powell clearly alluded to the possibility of easing in 2024 at the December FOMC meeting, Fed officials since then have pushed back on the idea of that happening imminently. In that vein, we expect Wednesday's FOMC meeting minutes to unveil that the Committee is not entertaining the case for rate cuts just yet.”