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FOMC one vote from signaling four hikes in 2018

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NEW YORK (Scrap register): Brown Brothers Harriman pointed out that the voting makeup of the Federal Open Market Committee is only one vote away from hiking interest rates four times this year rather than three.

Policymakers wind up a two-day meeting Wednesday. They are expected to hike interest rates another 25 basis points, but traders will be watching for clues of future monetary policy, including the Fed’s so-called dot-plot that shows expectations for future monetary policy by individual policymakers.

For the median forecast to move to four hikes this year…only one member has to shift their vote, said BBH. It is that close. Failing to do so would be seen by some as a dovish hike, though the Fed funds futures strip does not show the market is convinced of an accelerated pace.

Investors will also be trying to gauge the pace of tightening in 2019.  The Fed itself seems split, with most of the regional presidents appearing more concerned about the risks of an inversion of the yield curve than the board of governors, BBH added.

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