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The FOMC minutes highlight reel: The pros and cons for raising rates

By NexChange
Capital Markets

Reading the Fed's FOMC minutes can be a beast sometimes, so in case you missed it, here's a chopped, highlighted, yet expertly curated version for the man – or woman – on the go.

Pros for raising rates:

Household spending, business investments figures are looking good.
Labor market is improving, job gains are solid, and unemployment fell “to a level close to most participants' estimates of its longer-run normal rate.” Plus, labor resources are apparently better utilized than they were earlier in the year.
Real GDP growth was stronger than expected.
Inflation will pick up as labor continues to improve.
Housing looks robust, and looks like it’ll stay that way for some time.
“The conditions for policy firming had been met or would likely be met by the end of the year.”

Cons for raising rates:

Global economic developments may have added downside risks to the U.S. economy.
Inflation is still below their 2% target.
World developments may put more downward pressure on inflation in the near term.
More of the FOMC members are spooked about inflation than before.
Progress, “still possible” in the labor market, and a number would like that to happen so inflation could reach 2%.
Recent core price inflation readings where underwhelming.
China, emerging markets are sending the dollar higher and thus, holding core price inflation lower.
Premature tightening might hurt the FOMC’s inflation objective.

Guess that’s it then. With mean CPI trending lower, there's no way the Fed's lifting rates anytime soon. And then there was that nasty September labor report, which printed after the Fed's policy making committee met.
Photo: Day Donaldson

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