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"The minutes from the July FOMC meeting were less hawkish than the market feared. As widely noted, the Committee was divided on the need for another interest rate hike. It is important to remember, however, that the decision to act will ultimately rest with Fed Chair Yellen. There will be no rate hike until Yellen believes a rate hike is warranted. Given that Yellen is among the most dovish on the Committee, we must assume that Yellen is among the faction who expressed a preference to delay action.
Thus, after reading the minutes, we remain comfortable with our view that the Fed Chair is in no hurry to hike and that the odds of a move in September are relatively low.
...In our view, the "several" and "some" participants noted above almost surely includes Yellen, who is among the most dovish of the Committee members. If we are right, then Yellen is sticking to her risk management policy approach and feels little urgency to raise rates. While the data of late have been reassuring, the hurdle for hiking -- i.e. a sustained move up in inflation and/or evidence that suggests the economy has enough momentum to withstand a downward shock to demand -- is pretty high and does not appear likely to be met by the September meeting. Maybe by December, but December is a long way off (and, in any case, we are skeptical)".
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