September FOMC: Considerably as expected The FOMC made very few changes to its September statement. As we had expected, the committee retained its description that labor market resources remain significantly underutilized and the funds rate will remain in its current target range for a considerable time after asset purchases end.
The committee also indicated it expects the asset purchase program to end in October, which is in line with Chair Yellen’s testimony to Congress and her comments at Jackson Hole. The only other minor change of note in the statement came in the committee’s description of inflation, where it now says inflation has been running below its longer-run objective as opposed to moving closer to the committee’s objective.
We continue to expect the committee to raise rates in June of next year, with risks skewed in favor of a March tightening should convergence towards the Fed’s targets happen faster than anticipated.
Barclays