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Fed’s Dissenter May Be Sending a Signal

The Fed's statement was little changed, with a nod given to the improvement in third quarter growth and increased household spending.

Chicago Federal Reserve President Charles Evans
Source: chicagofed.org
Chicago Federal Reserve President Charles Evans

There was no policy change.

The hawkish Fedboard members, who opposed the 'operation twist' vote last month, stayed on their perches this time around, and just the lonesome dove, Chicago Fed President Charles Evans dissented, complaining that the Fed did not do more to stimulate the economy.

Last month, as you recall, there were three dissenters, the most since the early 1990s.

Nomura U.S. economist Jeff Greenberg said the Evans dissent was interesting in that it may be sending a message on timing:

"If the Committee were really considering easingfurther at the December meeting, but considered November inappropriate since they announced initiatives after the previous two meetings, then Evans would have withheld his dissent. We can deduce from his decision to dissent that easing is not coming in December, barring a significant change in the outlook," Greenberg wrote.

Courtesy of CRT Capital's senior Treasury strategist Ian Lyngen, a copy of the latest Fed statement, along with the changes made, click here.

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