FOMC: We have Lift-Off – BBH

By FXStreet FXStreet (Guatemala) – Analysts at Brown Brothers Harriman explained that the Federal Reserve delivered a hawkish hike.

Key Quotes:

“The dot plot reflects expectations for four rate hikes in 2016. There were no dissents. This is important. It underscores the decisiveness of the decision. There have been three voting Fed members that were thought to be likely dissents. The Fed will also continue to reinvest maturing securities until the normalization process is well underway. We think it may be an issue near mid-year at the earliest.

We recognize that some think that failure to adjust the balance sheet gives it a dovish cast, but this never seemed like a realistic possibility. The risk factors that are cited are not new.

The Federal Reserve’s economic assessment was little changed. It did downgrade its inflation assessment by noting that the “survey measures of longer-term inflation expectations have edged down.” In September, they had said they were stable.

Ironically, even though it is the first hike in nearly a decade, the most important thing is the Fed’s guidance for the next move. The Fed continues to signal a hike every quarter, and this is …read more

Source:: FX Street