Awaiting the Federal Reserve today. A few brief excerpts via:
- 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.
- 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
Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.