The FOMC meeting minutes from the March 15th event provided some hawkish tones. However, the dollar did not really react strongly enough to the news. Here are two additional opinions on the implications of the document.
Here is their view, courtesy of eFXnews:
FOMC Minutes: A Good NFP On Friday Means Another Fed Hike In June – CIBC
CIBC Research notes that the minutes of the March Fed meeting revealed that regarding rate hikes, the FOMC seems to be leaning more towards job numbers than GDP, arguing that some of the slow tracking measures for Q1 output reflect “temporary factors” or problems with seasonal adjustment.
“The greatest unity seems to be on the view that the labor market was near maximum employment,” CIBC notes.
As such, CIBC argues that, so another good jobs number on Friday would be very much in line with a rate hike in June, notwithstanding some of the disappointments we see in Q1 growth indicators.
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FOMC Minutes: Fed To Start Balance Sheet Reduction Before Year-End – SEB
SEB Research notes that the most interesting point in today’s FOMC minutes was the discussion on reducing the securities holdings, which seems likely to begin already this year if the economy is strong enough for the Fed to lift rates at least two more times before year end.
In that regard, SEB argues that it now seems likely to expect the Fed to begin reducing securities holdings at one of the last two meetings in 2017 and most likely at the December meeting.
SEB maintains its forecast of two more hikes this year.