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FOMC minutes focus on forward guidance - ING

FXStreet (Łódź) - Rob Carnell from ING observes that the latest Fed minutes show that a lot of attention was devoted during the meeting to the phrase "considerable time", which describes the interval between the end of QE and the first rate hike, and whether it's confusing.

Key quotes

"It seems anachronistic. Of course, there will be a time when such wording becomes important again, but apart from one early fleeting reference to lower inflation as a result of a faster than expected
decline in oil prices, the minutes looked like the product of a bygone age."

"When the Sept 16-17 meeting was being held, WTI crude prices were picking up again, and nearing $95/bb. They are at $87 today. And this is not some local supply issue, Brent is down at around $90 too."

"If low oil prices persist, and we have no strong reason to expect oil to push higher any time soon, we anticipate this having a substantial negative impact on headline US inflation in the coming months. "

"And in the process, the argument may well move on from how much labour slack there is in the economy, and how long following the end of QE before the first rate hike, to how soon the Fed can move inflation back towards its 2.0% target – the other part of its dual mandate."

"So whilst these minutes could certainly be described as dovish, they could become much more dovish in the months ahead."

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