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Federal Open Market Committee (FOMC) statement due Wednesday, September 21, 2022 – preview


Awaiting the Federal Reserve today. A few brief excerpts via:

Societe Generale:

  • We expect a third rate hike of 75 basis points.
  • There has been talk of 100 basis points, but Fed officials pushed back on that option earlier and we don’t expect them to take it now.

TD

  • We expect the FOMC to make another large rate hike of 75 basis points, bringing the Fed Funds rate target range to 3.00%-3.25%.
  • By doing so, the Committee would raise the policy stance above its estimate of the long-term neutral level.
  • We also hope that the FOMC will provide more hawkish signals via its updated economic projections, and that President Powell will build on his message from Jackson Hole.
  • Attempting to buy the rumor/sell the fact for the USD, we prefer to be neutral. As the curve has aggressively repriced the terminal, there is a risk that Powell could channel Volcker on messaging. Over the rest of the year, we still see more USD strength.

Previous previews here:

FOMC forecast, +75 bps up but high inflation means +100 bps is a risk

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