Fed: BNP expects new rate hick in March following Fed meeting minutes

In a note published today, BNP reviews the Fed minutes released yesterday evening:

"What stands out in the Fed's minutes regarding discussions of low inflation and the fact that "several" participants demonstrated uncertainty regarding the inflation outlook, or anticipated downside risks to their forecasts.

In terms of the discussions on the pace of the rate hikes, they focused on the justification of "incremental" increases, which are considered appropriate by the FOMC. There has nevertheless been no explanation as far as what the term "progressive" mean to the FOMC.

What should we expect in the future?

We continue to expect a further rate hike in March, with a probability of about 80%. In all, we expect 3 rate hikes in 2016, probably with a break in the 4th quarter."