Patient Fed now unlikely to raise rates until mid-year

While the strength of real economic growth and employment suggest that the Fed should begin to raise rates very soon, the mixed news on wages, the lack of any pick-up in core inflation and recent market volatility seem to have persuaded officials that they should delay lift-off until the middle of this year. As a result, next week we expect the Fed to maintain the language in its post-FOMC meeting statement that it "can be patient in beginning to normalise the stance of monetary policy".