New rotation at the federal reserve – BBH

By FXStreet FXStreet (Delhi) – Sam Waters, FX Analyst at BBH, notes that driven by overwhelmingly positive employment data prints in October, and under the assumption that price pressures will continue to shepherd inflation rates towards the Federal Reserve’s target of two percent, the Federal Open Market Committee (FOMC) has decided to hike interest rates for the first time in nine years.

Key Quotes

“Yellen stated that economic conditions warranting liftoff have been met, including diminished risks from global economic circumstances. The cadence of further tightening will be at the consensus of a new rotation of voting regional Fed Presidents and the permanent voting members on the Board of Governors.”

“The FOMC is captained by the centrist Troika of permanent voters: Janet Yellen (FOMC Chair), William Dudley (President of the New York Federal Reserve), and Stanley Fischer (Board of Governors, Vice Chair). Their individual views disclose marginal divergences, but together they are the policy-driving faction, and appropriately denominated as the relative center of hawkish and dovish bias.”

“The remaining Governors will carry into 2016 and continue to drive their dovish influence. Two prominent Governors, Lael Brainard and Daniel Tarullo, claim that improvements in the labor market are steady but not yet sufficient enough to warrant …read more

Source:: FX Street