FOMC recap: Expect 1 hike this year, 2 hikes in 2017 & 2018 - Nomura

Research analysts at Nomura present a review of the June FOMC monetary policy decision, noting that key language in the FOMC statement on policy was essentially unchanged.

Key Quotes:

“The FOMC did not change its interest rate targets today, and key language in the FOMC statement on policy was essentially unchanged.”

“In addition, the FOMC’s economic forecasts changed little.”

“The FOMC’s forecasts for 2017 and 2018 came down even more.”

“In the post-FOMC meeting press conference, Federal Reserve Chair Yellen acknowledged that FOMC participants continue to lower the path of interest rates that they think will keep the economy “on an even keel.”

“Our outlook for policy has not changed. We still expect one hike this year, and two hikes in 2017 and 2018.”

“We think the most likely timing for the next hike is September, which reflects our judgment that the economy will grow faster in the second half of this year than its 1.1% pace in Q4 2015 and Q1 2016.”