The Federal Reserve decided at its October meeting to delay an interest rate hike and chose not to significantly alter its guidance. In a new report, HSBC analyst Kevin Logan interpreted the FOMC’s decision and explained HSBC’s predictions surrounding the start of the next tightening cycle.

International Worries Subside

The first observation that Logan made about the Fed’s statement is that the committee no longer made reference to international developments that could negatively impact the U.S. economy.

Since the Fed’s last meeting in September, U.S. equity markets have recovered from an August selloff triggered by fears of a market collapse and economic slowdown in China. Although concerns over the economic health of China remain, markets have stabilized and the fear level has declined.

What To Watch For

The language in the FOMC statement indicated…

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