7/18/2019 FOMC Meeting Minutes

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The World Overall

One Financial | Andrei Wogen| finance.wogen@gmail.com| 02-19-15

 

Fed Minutes — Seems the Members

Like Low Rates

The Fed minutes for their January meeting, reveals that the Fed isindeed fine with being patient with regards to when they will

likely hike rates. They raised concerns about weaker growtharound the world and some slowdown in certain sectors of theAmerican economy. The current weak inflation was also a mainworry with many officials opting to keep rates lower for longer.Members of the committee want more evidence of continuedgrowth and signs of inflation improving before the first liftoff inrates occurs. Also there were concerns voiced about the currentdevelopments in the Middle East and Ukraine as well as Greeceand China.All-in-all though, the it looks like the Fed will continue to leaverates for a while yet as they want more evidence that the US andglobal economy and condition is doing better. This does too, inmy mind put into question what we have heard from Fedmembers recently as they seem to be much more optimistic on

when rates will rise than what we are getting from the meeting isshowing. Something to keep an eye on then, just the divergencethat I see is happening between Fed public talk and Fed privatetalk showing via their meeting minutes in particular.The markets responded as such with the US dollar falling acrossthe board in at the onset of the release of these minutes. Rates onthe US 10-year also fell a bit on the news. So it would seem thatmarkets are thinking rates will move up a bit later than from lastmeeting. And rightly so.On a personal note, just looking ahead, I am still expecting thatthe Fed will not raise rates this year. My reasons include a strongDollar causing worry for the Fed as it will basically act as quasi-tightening, a US economy that grows well but not as strong aslast year which I expect will include continued low inflation that

I expect will last until at least the middle of this year. Also because of global developments causing both global economicweakness and political and social unrest, causing yet moreeconomic weakness, this will also cause the Fed to hold off onrates. So I don’t expect much of a change in the Fed’s tone in theirminutes, and most certainly not as fast as some out there areexpecting.