by Bill McBride on 12/16/2015 10:42:00 PM
Wednesday, December 16, 2015
From Tim Duy at Fed Watch: As Expected
Today, the FOMC voted to raise the target range on the federal funds rate by 25bp. The accompanying statement and the Summary of Economic Projections offered no surprises. That very lack of surprise should be counted as a "win" for the Fed's communication strategy. A little bit of extra direction since September went a long way.Thursday:
No dissents; none of the possible dissenters thought their objections were sufficient to deny Federal Reserve Chair Janet Yellen a unanimous decision on this first hike.
The median forecasts for growth, employment, and inflation were virtually unchanged. Note that the central tendency range for longer run unemployment shifted down; participants continue to shave down their estimates of the natural rate of unemployment. The median rate projection for 2017 and 2018 edged down. This understates somewhat the decline in the range of the central tendency.
As I am running short of time today, I will leave any analysis of the press conference for a later time. Gradual, data dependent, not mechanical (not equally spaced or sized hikes), etc.
Bottom Line: Almost as exactly as should have been expected.
• At 8:30 AM ET, initial weekly unemployment claims report will be released. The consensus is for 270 thousand initial claims, down from 282 thousand the previous week.
• At 8:30 AM, the Philly Fed manufacturing survey for December. The consensus is for a reading of 1.2, down from 1.9.
Posted by Bill McBride on 12/16/2015 10:42:00 PM