- FOMC minutes
Minutes of the latest FOMC meeting were scarce on new information, showing once again that the Fed opted out to remain patient in beginning to normalize the monetary policy. Thus, the Fed is unlikely to raise interest rates until April. The Fed reiterated that policy decisions depend on the economy's progress toward full employment and 2% inflation, the central bank's dual mandate. Although cheaper energy costs and stronger Greenback are seen to keep inflation below the Fed's inflation goal, minutes revealed normalization might start even when core inflation is still short of target. Nevertheless, the Fed board members would have to be "reasonably confident" that inflation would return to 2%. Minutes also showed that the Fed saw cheaper energy costs as a positive driver for the US economy and the labour market. New quarterly forecasts showed that while most Fed policy makers expected a hike of the federal funds rate in 2015, they also lowered their expectations for the pace of lifts that would follow. The median forecast called for the rate to climb to 1.125% by the end of the year, down from the 1.375% predicted in September.
Meanwhile, initial jobless claims across the US dropped to a seasonally adjusted 294,000 in the week ended January 3, the Department of Labor said. The most crucial piece of data in the labour market, the non-farm payroll report, is due today.
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