BRIAN FABBRI | BNP PARIBAS
While the FOMC left the federal funds rate at 0–0.25 per cent, this was the first time since emergency conditions were set in place that a formal dissent has been made. Moreover, the text exposed important nods in the direction of a more confident view of the economic recovery than in recent statements, which were intended to provide a glacial shift in policy intention.
STEPHEN STANLEY | ROYAL BANK OF SCOTLAND
The statement surprised in the hawkish direction, which should raise eyebrows but is probably not enough to materially change the rate outlook. One dissent does not mean that the centre of gravity on the committee is shifting, but the tone of the statement suggests policymakers are finally beginning to think more seriously about formulating their exit strategy.
PHILIP SHAW | INVESTEC
The statement continued to ‘upgrade’ the language used to describe the recovery, though the Fed’s phrase that economic conditions are likely to “warrant exceptionally low levels of the federal funds rate for an extended period” suggests it is not presently in a hurry to raise rates. However Hoenig’s dissent suggests there may have been a meaningful discussion over this.