FOMC statement passed by with little fanfare - ANZ

FOMC statement has passed by with little fanfare as the FOMC upgraded its description of the economy, noting that “the labor market has continued to strengthen and that economic activity has been rising at a solid rate”, which is firmer than the “rising moderately” language used in September, explains the analysis team at ANZ.

Key Quotes

“Markets were expecting that change. On the inflation picture (where much of the debate at the Fed seems to be about), core inflation was noted to have “remained soft”, which is perhaps a little more dovish, but inflation is still expected to rise towards 2% over the medium term.”

“Overall, the statement is likely to be seen as providing the all clear for a rate hike next month, although the market was effectively all on board with that view anyway, with a hike around 80% priced ahead of today’s statement. The focus now turns to the likely White House announcement of the new Fed chair tomorrow, where markets seem to be leaning towards Powell. Many regard him as largely maintaining continuity at the Fed in terms of leadership and policy direction.”