Surprised that North American banks are neutral? Perhaps we shouldn’t be. While Fed communications as a whole have trended relatively dovish as of late, the Bank of Canada’s hawkish mood brings balances to the sentiment of the continent’s central banks.
The central to this trend in Fed communications have been the consistently dovish FOMC meeting minutes, and today’s release continues that trend. But taken in the context of meeting minutes scores, however, today’s release is actually quite neutral.
The minutes characterized U.S growth as “moderate”—much better than the neutral “modest”—and were ambivalent about the global economy: the Fed’s concern for Europe is dissipating as its concerns for China grow. Given this tempered language, Prattle does not think a rate increase is imminent.
Bottom line: Unless economic data (both in the U.S. and abroad) dramatically improves, Prattle sees a September rate hike as unlikely.
Every week the Prattle team will be publishing its take on a global central bank region. There are 4 regions–European, North American, South American, and Asian–and the regions will be scored based on our analysis of all the central bank communications in that region over the past week. Indicating the “hawkishness” or “dovishness” of the region, the scores will be given in integers ranging from -2 to +2 where -2 is extremely dovish and +2 is extremely hawkish.
For more precise scoring on individual banks, speakers, and communications, you can reach out to Prattle on our contact page or through this link.