Talking Points:
• The minutes offered greater detail to the Fed's decision on January 27th to hold
• Pressure to maintain the pace for 100 bps of hikes in 2016 looks to be ebbing with inflation and global concerns
• Despite the modest vindication of a skeptical market for rate forecasts, the Dollar didn't drop on the data
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Watch the recording of John Kicklighter's coverage of the FX market's reaction to the FOMC meeting minutes. While this was not an actual rate decision, the focus is not on past decisions but the heavy speculation on future intentions. In the details offered through this event, investors were looking for clues as to whether the central bank would keep its conviction for an aggressive 100 bps worth of hkes this year or ease back. A tempered view of inflation pressures, stated concern over global financial risks impacting the US economy and reference to softer growth potential seems to lay the road to a more measured pace of policy moving forward. Yet, fewer hikes is still significantly more hawkish than the 'no hikes' view reflected in swaps and Fed Fund futures. We looked at both the short-term reaction and the long-term implications it carries in the live event.
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