FOMC: Few surprises in March minutes - Nomura

Analysts at Nomura explain that the minutes from the March FOMC contained few, if any, surprises, but overall, the minutes were slightly hawkish, consistent with the upward revisions to the Committee’s projections for growth, inflation and the policy rate.

Key Quotes

“Participants expressed additional confidence in inflation reaching the Committee’s 2% objective in the near term, while noting that trade policy developments pose some downside risk to the economic outlook. Elsewhere, participant comments on financial conditions reiterated the tone of recent speeches by noting that, while recent developments have been somewhat choppy, financial conditions overall remain accommodative.”

“On fiscal policy, the minutes indicated some uncertainty from the Committee in terms of the timing of the impact and the magnitude. Some participants noted that historically there is little precedent for fiscal stimulus of this size at a time when the unemployment rate remains low and the economic outlook bright. Finally, participants discussed their expectations for the long-term neutral rate, noting that secular forces will likely continue to exert downward pressure. Taken altogether, the minutes today reinforce our expectation of four rate hikes this year.”