“The committee judges that it can be patient in beginning to normalize the stance of monetary policy,” the Federal Open Market Committee said today in a statement in Washington, removing a calendar-based phrase with language that gives it more flexibility
Treasuries rose for a fourth week, with 10-year yields dropping the most in three months, as investors awaited signals on the probable timing of Federal Reserve interest-rate increases in policy-maker speeches today.
A number of participants said growth “might be slower than they expected if foreign economic growth came in weaker than anticipated,” according to minutes of the Sept. 16-17 Federal Open Market Committee meeting released today in Washington.
As speculation deepens the European Central Bank will start quantitative easing just as the Federal Reserve ends its own bond buying, Europe is gaining more leverage over investors globally as the specter of deflation in the region unleashes greater demand for fixed income.
Though the vote in favor of last month’s policy statement was a relatively tame 9-1 decision, with hardcore hawk Charles Plosser as the only dissenter, the recently released minutes showed more discord within the committee than the statement let on.
The inability of the U.S. dollar to significantly strengthen against its G10 counterparts dominated market chatter earlier this year, but a more hawkish Fed backed by strong US economic data appears to have changed the fortunes of the world’s most traded currency.