The FOMC left its statement broadly unchanged compared to its previous one, holding off from any slowing of the pace of its asset purchases or any hints in that direction. This was pretty much as expected. Meanwhile, its guidance on the economic conditions necessary for the central bank to start steering short-term interest rates upwards were also left unchanged despite indications that the FOMC is considering lowering the threshold unemployment rate. Meanwhile, it noted that the economy was expanding only modestly but that growth is expected to pick up. At the same time, the labour market had improved, but the unemployment rate remained high. On a slightly dovish note, it recognised that inflation ‘persistently below its objective could pose risks to economic performance’ but expected it to move back to target over the medium term. Overall, we remain of the view that the FOMC will gradually begin to slow the pace of its asset purchases at the September meeting. There is also a possibility that it might change its forward guidance to indicate an even later start of rate hikes, but we think that the risk that it will be perceived to be behind the curve could well prevent such a move. Our base case is that the first policy rate hike will come in early 2015.