MNI BRIEF: Trump Likely To Let Powell Serve Full Term-Moore

MNI BRIEF: Canada Household Debt Tops $3 Trillion In 3Q

MNI BRIEF: Trump Likely To Allow Powell To Serve Term - Moore

MNI INTERVIEW2: Poland To Push For EU Defence Fund

MNI BRIEF: China To Keep Stabilising Housing Market - CEWC

MNI BRIEF: China Focus On Boosting Consumption In 2025

EZ/UK Bond Supply Calendar: Belgium ORI Facility on Friday

US EIA:NAT GAS STORAGE -190 BCF TO 3,747 BCF DEC 06 WK

MNI: US JOBLESS CLAIMS +17K TO 242K IN DEC 07 WK

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Lack Of Forward Guidance Change Marks A Modestly Net Hawkish Outcome

FED
The changes made to the Statement vs June are in a dovish direction. The first paragraph notes that job gains have "moderated" (vs "remained strong) with unemployment having "moved up but remains" low (vs "has remained low"), with inflation remaining "somewhat" elevated, and "some" further progress in inflation toward 2%.
  • And in another notable change, reflecting recent FedSpeak by Powell and others, the 2nd paragraph codifies that the Committee is increasingly attentive to risks not just not inflation, but also to rising unemployment. Risks to achieving the dual mandate goals "continue to move into better balance" (vs "have moved toward better balance over the past year"), with the Committee now not just "highly attentive to inflation risks", but "attentive to the risks to both sides of the dual mandate".
  • But those aren't huge surprises, and the negative reaction in Treasuries suggest that it's what HASN'T changed in the Statement that is perhaps most notable in a hawkish sense: there is no new forward guidance on rates.
  • As we noted in our preview notes, no change here would have been interpreted as a slightly hawkish outcome. In previous cycles the FOMC has made it a little clearer via its guidance that it was considering making a move at the next meeting - not so here, if they are indeed thinking about cutting in September.
  • The significance of the lack of changes in the forward guidance will be a key question for Powell at the press conference in 20 minutes. Judging from the changes to the 1st two paragraphs, it's likely that he will emphasize data dependence once again in going "meeting by meeting" on rate decisions.
Fixed Income BulletsHomepagemarkets-real-timeCreditBulletMarketsEmerging Market NewsForeign Exchange Bullets

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.