While most members agreed that December could be an appropriate time to hike rates, Fed officials said an actual decision would be dependent on data. Some policy makers even said that it is unlikely that liftoff conditions would be met. Others saw reasoning to avoid delaying tightening. Most agreed that risks from abroad are now diminished. Several Fed members said downside threats to the outlook remain.
The Minutes document seemed to fail at bolstering the case for an imminent rate hike. Two-year government bond yields fell in the aftermath of the transcript release. At the same time, S&P 500 futures – a proxy for risk sentiment – rallied. Traders may have cheered the prospect of rates staying near zero for longer as supportive for economic growth at a time when overall global performance appears to be slowing. This can bode well for risk-sensitive assets.
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