Fed hikes on track for mid 2015 - BBH

FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman noted the conditions surround the Feds outlook in respect of the key labour force component to its interest rate policy.

Key Quotes:

"The Federal Reserve upgraded its assessment of the labor market in its statement at the end of last month. It noted that the "under-utilization of labor resources was gradually diminishing.""

"There was nothing in the October jobs report that will challenge that assessment. The Fed's new labor market conditions index will be released at the start of the week and the JOLTS report on Thursday."

"We expect the continued gradual improvement in the labor market will allow the Federal Reserve to hike rates around toward the middle of next year. Yellen and Fischer have recently been emphasizing the Fed's desire to minimize the impact of changes in its monetary stance."

"It will do so by being as transparent and forthright as possible. It appears that the process by which it announced and then implemented the exit from its asset purchase program serves as the model for the communication of its first hike”.

“Before the weekend, NY Fed President Dudley reaffirmed that barring a significant economic surprise, the Fed funds rate will likely increase next year."