FOMC: Rates likely will be kept on hold - ANZ

Research Team at ANZ, suggests that for the FOMC, expectations are that rates will be kept on hold.

Key Quotes

“Whilst levels of resource utilisation in the labour market could justify a rate rise, headline inflation remains significantly below target and activity readings on the economy have been at best patchy recently.

Central case expectations are that the dot points will be cut by 25bps and the FOMC will maintain its optionality by leaving one rate hike in for December. If the FOMC maintains its view of three hikes next year and in 2018 that would automatically lead to a reduction in the median estimates of fed funds for those years. Following the disappointing growth outturn in the first half of this year, there are downside risks to this year’s growth forecast (currently 2.0%). Forecasts for 2019 will also be published.”