Trump administration reviews plan to allow Nvidia AI chip sales to China - Reuters
The annual rotation of voting rights effective from the 27-28 January FOMC meeting gives more power to the doves on the committee. Notably, the two überhawks, Charles Plosser and Richard Fisher, who both dissented at the December meeting, will lose their voting rights this year. The most pronounced dove, Narayana Kocherlakota, who also dissented at the December meeting, will become a non-voter as well. However, recent comments from Chicago Fed President Evans suggest that he could take over this position and dissent once the Fed starts signalling that a rate hike is imminent.
Despite this more dovish composition of voting members of the FOMC, we stick to our view that the Fed will deliver the first rate hike in June this year. At the latest press conference Chairman Yellen sounded more hawkish than previously, which we think is more important than the voting rotation. Most voting members are centred around Yellen and she is likely to have a large influence on their decision. The key message from Yellen is that the FOMC decision will be data dependent and if we are right in our economic outlook, the unemployment rate will reach 5.5% around June this year. This is not far from the Fed’s long-term natural level of 5.2% to 5.5% and it will be difficult for the FOMC to argue that the funds rate should remain unchanged with unemployment at this level.
To Read the Entire Report Please Click on the pdf File Below