Fed: Dealers See Mid-2015 Interest Rate ‘Liftoff’



The following excerpts are provided from the recently released minutes of the Federal Reserve October 28-29 meeting:

Federal Funds Rate

The expected path of the federal funds rate implied by market quotes shifted down notably, on net, over the period. Market-based measures suggested that the expected date of the first increase in the federal funds rate was pushed out from the third quarter of 2015 to late 2015. However, the results from the desk’s October survey of primary dealers indicated that the dealers’ projected path of the federal funds rate was little changed from the September survey, with dealers continuing to see the middle of next year as the most likely time of liftoff.

Industrial Production

Industrial production increased briskly in September after having been little changed, on net, over the first two months of the quarter, and the rate of capacity utilization in the manufacturing sector moved up. Readings on new orders from the national and regional manufacturing
surveys were generally consistent with moderate near-term increases in factory output, but automakers’ production schedules for the fourth quarter pointed to some slowing in the pace of motor vehicle assemblies.

Business Equipment Spending

Real spending on business equipment and intellectual property products appeared to have risen at a moderate pace in the third quarter. Nominal shipments of nondefense capital goods excluding aircraft were little changed, on net, in August and September after a solid increase in July. New orders for these capital goods declined in September but remained above the level of shipments, indicating that shipments may increase further in subsequent months. Other forward-looking indicators, such as national and regional surveys of business conditions, were generally consistent with moderate gains in business equipment spending in the near term.

To link to Federal Reserve minutes from Oct 28-29 meeting, click here.


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