Diminished near-term risks, Esther George wanted to hike - Rabobank

Analysts at Rabobank explained that as expected, the FOMC stressed the strong Employment Report for June.

Key Quotes:

"Instead of ‘the pace of improvement in the labor market has slowed’ and ‘job gains have diminished’, which the FOMC wrote at the June meeting after the disturbingly weak nonfarm payrolls for May, the Committee now says that ‘the labor market strengthened’ and ‘job gains were strong in June following weak growth in May.’ On balance, the Fed judges that payrolls and other labor market indicators point to ‘some increase in labor utilization in recent months.’ All’n all, the FOMC thinks that ‘near-term risks to the economic outlook have diminished.’

The decision to keep the target range for the federal funds rate unchanged at 0.25-0.50% was not taken unanimously. Esther George (Kansas City Fed) wanted to hike today by 25 bps. Note that she did the same thing in March and April, until she was silenced in June by the employment growth slowdown in May."