October FOMC minutes: December stays in sight

The October FOMC minutes covered a wide-range of views among the Committee, with arguably a few more dovish comments than the market anticipated. Nonetheless, "most" Fed officials thought the conditions to hike "could well be met by the next meeting." Specifically, the cumulative improvement in the labor market and reduction in global risks should give many FOMC voters great confidence in the outlook. That said, it was notable that "most" voters still were not yet reasonably confident on their inflation outlook. The Fed remains data dependent; the expectation remains that conditions should allow the FOMC to hike come the December meeting.

The October minutes confirm the view that the FOMC generally saw the increase in global uncertainty and market volatility ahead of the September meeting as an acute event rather than a systemic worsening. "Most" participants reported that downside risks from abroad had "diminished," and saw broadly risks to the outlook as "nearly balanced." Only "a few" thought global risks were "still significant." An intensification of these risks could once again lead the Committee to delay, but to date the global outlook is more supportive of hiking than it was in September.