On June 16 I wrote “The Fed and the “asymptotic approach principle”, where I commented on Tim Duy:
The Federal Open Market Committee meets this week to discuss the path of monetary policy.
Any possibility of a rate hike at the meeting’s conclusion on Wednesday was already crushed under the weight of weak data early in the year. To be sure, the data support the transitory nature of the weakness, justifying Federal Reserve Chair Janet Yellen’s optimism last month, but it remains too little, too late. Instead, turn to September as the next opportunity for the first rate hike of this cycle.
In a couple of months, “Tim-In” for December…
A couple of months later (today), Tim Duy doesn´t quite chime for December, but is getting there:
Bottom Line: I have believed that there was a better than 50% chance that the Fed would move in September and am hesitant to move much below 50%. I didn’t expect the minutes would give a clear signal regarding September, and am not surprised by the dimensions of the general discussion. And I am wary the Fed may be less responsive to financial market disruption than during most of the post-crisis era given than the economy is close to their estimate of full employment. This is shaping up to be one of the most contentious meetings since the tapering debates. We will soon learn more exactly what data the Fed is data dependent on.
And I´m willing to bet that come November, December will be “getting off the table!”