Fed policy-makers to consider inflation and a hike? - Scotiabank

Analysts at Scotiabank explained that the USD has been under considerable pressure since late July Fed meeting, softening in response to the turn in U.S. data surprises and market participants’ fading expectations for Fed policy normalization.

Key Quotes:

"The softening in expectations appears somewhat excessive as we consider the relatively robust growth outlook anticipated through the second half of 2016 with an Atlanta Fed GDPNow ‘nowcast’ forecasting model looking to a 3.6% pace of growth for Q3.

Steady growth and further improvement in labor market data should provide for continued progress toward the Fed’s inflation target, providing for added confidence to Fed policymakers as they consider the timing of their next interest rate hike."