FOMC: Expect few new developments – Nomura

Analysts at Nomura expect few new developments out of the today’s FOMC meeting as they think the post-meeting statement will acknowledge somewhat softer than-expected economic activity thus far in 2018.

Key Quotes

“The Committee will likely expect this slowdown to be largely transitory. In a speech on 18 April, New York Fed President Dudley noted that he views the slowdown as “mostly due to two transitory factors: a retrenchment following the spurt in activity from recovery efforts following Hurricanes Harvey, Irma, and Maria, and the delay in this year’s tax refund payments to those receiving certain tax credits.” For the May meeting, the minutes (scheduled for release on 23 May) will rightly deserve more attention given the Committee’s expected discussions on trade, fiscal policy, inflation and financial conditions.”

“Consistent with incoming regional business surveys, the Beige Book, prepared for the May FOMC meeting, reflected elevated concerns over US trade policies among business contacts. The minutes may include discussions on the short-term impact of a deterioration in business sentiment in response to developments in trade policies.”