Still Hanging on the Fence…

Economic Research	28 July 2016
US
Economic Highlights
Still Hanging on the Fence… Broadly, the July 26-27 Federal Open Market Committee (FOMC) meeting was expected to be a bland event. While the cheerier tone of the post-meeting statement, along with the unsurprising hawkish dissent from George, suggests a continuing bias within the FOMC for additional policy firming this year, the timing of the next hike remains up in the air. At this juncture, we suspect that the core consensus within the FOMC is still on the fence, conceivably allowing incoming information on the economy and signals from financial markets to lead the way. Although the prospect of a near-term rate hike appears to be less challenging, the bar for raising rates in September, which is probably lower at this moment, still seems to be fairly elevated. Therefore, we think that the odds, while in a state of flux, are still in favor of a 25bps hike at the December 2016 meeting at this time. Economist:  Thomas Lam  | +65 6533 0389
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