And NatWest's Michelle Girard......>

US TSYS/RESEARCH: And NatWest's Michelle Girard and Kevin Cummins said further

on the July FOMC mtg minutes that "in general, the Committee did not appear

overly concerned about financial stability risks. However, as we have said

previously, the sharp easing in financial conditions this year is the strongest

argument in favor of continued gradual policy normalization, even in the face of

slower inflation."

- They "continue to look for the Fed to hike rates next in December and to

maintain a once-per-quarter hiking pace through 2018. By the end of next year,

we forecast the fed funds target range to be 2.25%-2.50%. Market participants

remain skeptical, believing the Fed will under-deliver on the guidance they have

provided. However, with unemployment solidly below the Fed's NAIRU estimate, the

global economy stronger than at any point thus far in the cycle, financial

conditions accommodative, and financial stability on the Fed's radar, we believe

the hurdle is high for policymakers to deviate from the gradual policy

normalization path they have set out."