U.S. rate hike- June, July or September?

In its statement, the FOMC has effectively eliminated the possibility of an April rate hike. But it put rate hikes squarely on the table from the June meeting onwards. In deciding whether to hike rates, the FOMC will consider realized and expected progress toward its objectives of maximum employment and 2% inflation. 

When asked what will give her confidence that inflation will get there in the medium-term, Yellen listed a number of factors. She would need to see a stronger labor market with shrinking slack. She will alsolook closely at inflation data to gauge whether the current weakness reflects transitoryfactors. 

While she would like to see a pickup in wage growth, she noted that this is not a pre-condition for raising rates. Lastly, if market-based measures of inflation expectations move up, that would also increase her confidence that inflation would return to 2% over the medium term.

Societe Generale notes its views on Thursday...

• We have long been calling for a June liftoff in rates and the outcome of today's meeting - while admittedly dovish in tone - does not change our view. 
  
  
• Ultimately, the decision to hike will be driven by the data and we expect the economy to evolve in such a way that it will prompt the Fed to hike in June. 
  
  
• We believe that the weather-related weakness in activity will begin to reverse in April. We expect continued strength in the labor market, with the unemployment rate in the 5.3-5.4% range by the June FOMC meeting.
• We also look for better evidence on compensation growth, in particular in the ECI data released in late we expect core inflation to stabilize near current levels while headline inflation begins to reverse in late spring.