Inflation remains biggest worry of FED

Latest FOMC minutes released last night revealed what FOMC participants chose to skip lift off in September, as inflation remains biggest concern for most of the policymakers. Policymakers are worried that recent adverse developments overseas have increased risks to growth and inflation in United States.

Though many of the policymakers feel that US economy robust enough for FED to pull the trigger this year, policymakers chose to wait for further evidence, given recent turmoil abroad to see if it had any material impact on US economy.

However, minutes are of September meeting after which weak payroll was reported and now most of the analysts expect FED to be more dovish in October's meeting, scheduled for 27-28th.

Views from investment banks -

• According to JP Morgan, FED policymakers both voting and non-voting showed greater concern over inflation.
• JP Morgan also pointed out that FED used - "Many" of the policymakers expects 2015 to meet conditions for first liftoff, instead of "Most" and "Several" concerned over downside risks to growth and inflation.
• Capital economists believe cautious tone in FED minutes make way for first rate hike in 2016.

Focus in now on October meeting, to see if recent payroll weakness materially changes whatever hawkish tone was left in September.