Interest rates remain unchanged in November 2017, what about December 2017?

In 1^st Nov,  the Federal Reserve announced the interest rate decision, the members agreed to maintain interest rates unchanged. In the monetary policy statement, suggesting that the December rate hike is still on the table, which stabilize the dollar and maintain its bullish future.

The monetary policy statement states that there are some satisfying economic performances, including steady economic recovery, solid employment growth, lower unemployment, and inflation in food and energy prices. Therefore, the next focus will be the overall inflation data instead. In general, the resolution suggests that the Fed is optimistic about the economic outlook. But will the next Chairman of the Federal Reserve lower the market’s expectation?  

Chairman of the Federal Reserve - Janet Yellen

Policy Stand: Neutral

Former U.S. President Barack Obama nominated Yellen for the Federal Reserve Chairman in 2014. Yellen has repeatedly stated that only when the economy had a substantial growth, they would put rate hike on the table.

Federal Reserve Chairman - Jerome Powell

Policy Stand: Neutral

Powell became a member of the Federal Reserve in 2012, and, like Yellen, Powell was appointed by former US President Barack Obama. Powell is also in favor of a step-by-step reduction in the balance sheet and that new asset purchase program is only considered under special circumstances. The difference between Yellen and Powell's policy proposition is that he tends to ease regulation of financial markets. Overall, Powell was considered the closest candidate to Yale's monetary policy.

Former Federal Reserve Director - Kevin Warsh

Policy Stand: Hawk

Between 2006 and 2011, former US President George W. Bush appointed Warsh as Federal Reserve director. Warsh has a formal legal background, but no formal economic background. In general, Walsh tends to take the regulatory position to ease the financial business environment. During the financial crisis, Worth had criticized former Federal Reserve Chairman Ben Bernanke's stimulus to monetary policy. So if Worth became the next chairman of the Fed,  it is believed that he would take a more hawk position in the future.

U.S. Dollar index Outlook:

Head and shoulders pattern remains intact, technical performance was positive, as the index remained above 94.00. It may continue to break 95 levels with assist of good market data. It also matches with our previous projection. (Read: U.S Dollar Index - What is the next target in 2018?) Investors should closely concern about the non-farm on Friday and will provide further guidance on the trend.

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