BOJ Seen Moving Toward December Rate Hike as Yen Slides 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
BOJ’s Kazuo Ueda Signals Potential Interest Rate Hike as Economic Outlook Improves 
New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
As expected, the policymakers at FOMC kept the interest rate unchanged at yesterday’s meeting. Current Federal funds rate target 225-250 basis points. However, FOMC participants reduced the IOER by 5 bps to 2.35 percent.
Let’s first assess the bias in monetary policy statement –
- Improvement in the labor market remains strong, and the economy expanded at a solid rate. (hawkish bias due to change of tone in describing economy)
- Job gains remain solid, and the unemployment rate low. (Mild hawkish bias; positive statement but same as before)
- Household spending has slowed. (Dovish bias)
- Business fixed investment has also slowed. (Mild dovish bias)
- Inflation both including and excluding energy and food, consumer prices is below 2 percent. Indicators of longer-term inflation measures little changed, on balance. (Neutral bias)
- Fed is closely monitoring the global economic and financial developments as well as measures of inflation. (Neutral bias)
- The decision was unanimous. (Neutral bias)
The statement was slightly more hawkish than the last statement which was mild dovish in nature. On balance, the Fed statement was slightly hawkish but without inflation shooting above target, or growth plummeting, the Fed is likely to sit tight.
