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FOMC Minutes: Dovish Fed Not Paving The Way For June Hike – SEB

The following is SEB Group's reaction to today's FOMC minutes from the January meeting.

It is our understanding that the Fed minutes did not suggest that the FOMC is paving the way for a June rate hike as "many officials were inclined to stay at zero for longer". Moreover, the drop in inflation expectations was apparently worrying since a number of participants emphasized that they would need to see either an increase in market-based measures of inflation compensation or evidence that continued low readings on these measures did not constitute grounds for concern.

While we may have a different view after Chair Yellen's semi-annual testimony before congress next week, the minutes are not suggesting to us that "patience" will be dropped as early as in the March statement. Our forecast still is for liftoff a few meetings later, in September. Mattias Bruér, SEB Economic Research

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