FOMC Review: Global developments resulted in postponement of liftoff – BBH

FXStreet (Delhi) – Research Team at BBH, note that the Fed is "monitoring developments abroad", which it cites in contrast to the roughly balanced risks for the labor market and economic activity. The FOMC statement explicitly cites "recent global economic and financial developments" as possible headwinds on the economy and may weigh on prices.

Key Quotes

“There is no escaping the fact the FOMC has been spooked by uncertainty raised by recent developments in China (though the FOMC statement did not specifically cite it) and the greater volatility of the capital markets. One can debate whether the Fed is correct or not, but to understand the way these decision-makers are thinking is very important.”

“From the Fed's point of view, domestic economic considerations warrant a rate hike. In fact, the dot plot indicates that 13 of 17 Fed officials expect that conditions will allow a hike this year. Richmond Fed's Lacker dissented in favor of an immediate hike.”