STATEMENT CHANGES
There were only two notable changes to the statement compared to the prior one as flagged in the statement comparison at the back of this publication.
Key is that language around forward guidance shifted. They now say:
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate….”
Instead of:
“In considering additional adjustments to the target range for the federal funds rate….”
This is material in that it injects fresh uncertainty into how much further the Committee thinks they will be cutting, and how over time.
The second change was the introduction of a dissenting voice. Cleveland’s Hammack preferred to hold at this meeting.
A MORE HAWKISH DOT PLOT
First, picking up on the last point is the observation that there were actually four dots that preferred a hold today, yet only one voting dissenter. That probably says that the other three Committee members are regional Presidents who aren’t in this year’s voting line-up but some of them may be when that changes in January.
In teeing up the subsequent points, charts 1 and 2 show the new dot plot of Committee rate projection and compared to our forecasts for the policy rate....
FUNDAMENTAL FROM SCOTIA BANK FOR ADDITIONAL EDUCATION.
There were only two notable changes to the statement compared to the prior one as flagged in the statement comparison at the back of this publication.
Key is that language around forward guidance shifted. They now say:
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate….”
Instead of:
“In considering additional adjustments to the target range for the federal funds rate….”
This is material in that it injects fresh uncertainty into how much further the Committee thinks they will be cutting, and how over time.
The second change was the introduction of a dissenting voice. Cleveland’s Hammack preferred to hold at this meeting.
A MORE HAWKISH DOT PLOT
First, picking up on the last point is the observation that there were actually four dots that preferred a hold today, yet only one voting dissenter. That probably says that the other three Committee members are regional Presidents who aren’t in this year’s voting line-up but some of them may be when that changes in January.
In teeing up the subsequent points, charts 1 and 2 show the new dot plot of Committee rate projection and compared to our forecasts for the policy rate....
FUNDAMENTAL FROM SCOTIA BANK FOR ADDITIONAL EDUCATION.
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