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FOMC highlights of a hawkish result – Societe Generale

FXStreet (Guatemala) - Ted Mermel at Societe Generale noted the results of the FOMC.

Key Quotes:

“They kept considerable but the Fed funds dots went up (a lot in the case of 2016)”.

“Key highlights from the FOMC: "Significant" and "considerable" stayed in, but the dots moved quite a bit higher”.

“The medians went from 1.125% to 1.375% for YE15, from 2.5% to 2.875% for YE16, and the 2017 median is at 3.75%”.

“One caveat is that they also changed the definition of the dots, from representing the target fed funds rate, to the mid point of the range. So there is also an added upward bias in that definition change”.

“As for Yellen's dots, if you assume that she is the 4th one from the bottom, that went from 2% to 2.125% for YE16, and her dot for 2017 is probably at 3.125%”.

“The FOMC also published the official set of exit principles”.

“There were no surprises here in terms of the sequence and the tools, but the mere fact that they put this out today rather than December adds to the overall hawkish tone of today's meeting”.

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