13 Oct

Inside the September FOMC Meeting: Key Points


Rates left unchanged in the September meeting

The last FOMC (Federal Open Market Committee) meeting was on September 20, 2017, and though US interest rates were left unchanged, the Fed announced that it would be beginning to shrink its massive $4.5-trillion balance sheet. The balance sheet unwinding program will begin in October, and the Fed will stick to the schedule released at the June meeting.

FOMC meeting minutes are released approximately three weeks after the FOMC meeting itself and give insight into the details of the meeting. Investors and analysts analyze the comments made at the meeting and try to forecast the Fed’s next moves.

Inside the September FOMC Meeting: Key Points

Key points discussed in the September meeting

In the September meeting, Fed members discussed the possible reasons that inflation (TIP) has stayed stubbornly low while unemployment stays at record lows. Members shared their views on the Treasury (GOVT) and the financial markets’ (SPY) response to the proposed balance sheet size reduction program.

The decision was unanimous to leave interest rates unchanged in the September meeting. There was some discussion between the hawks and doves with regard to a December rate hike, with some suggesting that rates should increase as labor markets have stabilized while others argued to wait for inflation to reach the 2% target rate.

Series overview

In the remaining parts of this series (below), we’ll discuss the September FOMC meeting minutes in detail and decide how the meeting minutes have changed the outlook for the equity, currency (UUP), fixed income markets (BND).

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