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Most Analysts Going For 75bp In July Post-June FOMC (1/2)

FED

Following the June FOMC meeting, it's now broad consensus that the Fed will move by 75bp at the July meeting (some upgraded their 50bp prior calls). Barclays was the only one to revise down its July hiking call to 50bp from 75bp; it's broad consensus that they will go by three-quarters next time:

  • Barclays: Now going for 50bp in July vs their previous expectation of 75bp "amid signs that consumption and the US housing market are slowing" as well as wage growth flattening. “75bp is a strong move – a statement hike. The Fed made one. Given what we are seeing in the economy and in housing, we believe it will not need to make another. We think they move to a 50bp hike in July.”
  • Deutsche: “We continue to expect the Fed will raise rates by 75bps again in July. Beyond, we expect 50bp increases in September and November, before downshifting to a measured pace of 25bp increments in December. We maintain our view of a 4.1% terminal fed funds rate reached in Q1 2023. Beyond that, we expect the recession built into our forecast to necessitate 150bps of cuts in the second half of 2023, bringing the fed funds rate to 2.625% by the end of the year.”
  • Goldman Sachs: “While there is more than one way to get there [to a median Dot of 3.25-3.50% by end-2022], we think the most likely path is our forecast of another 75bp hike in July, a 50bp hike in September, and 25bp hikes in both November and December.
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Following the June FOMC meeting, it's now broad consensus that the Fed will move by 75bp at the July meeting (some upgraded their 50bp prior calls). Barclays was the only one to revise down its July hiking call to 50bp from 75bp; it's broad consensus that they will go by three-quarters next time:

  • Barclays: Now going for 50bp in July vs their previous expectation of 75bp "amid signs that consumption and the US housing market are slowing" as well as wage growth flattening. “75bp is a strong move – a statement hike. The Fed made one. Given what we are seeing in the economy and in housing, we believe it will not need to make another. We think they move to a 50bp hike in July.”
  • Deutsche: “We continue to expect the Fed will raise rates by 75bps again in July. Beyond, we expect 50bp increases in September and November, before downshifting to a measured pace of 25bp increments in December. We maintain our view of a 4.1% terminal fed funds rate reached in Q1 2023. Beyond that, we expect the recession built into our forecast to necessitate 150bps of cuts in the second half of 2023, bringing the fed funds rate to 2.625% by the end of the year.”
  • Goldman Sachs: “While there is more than one way to get there [to a median Dot of 3.25-3.50% by end-2022], we think the most likely path is our forecast of another 75bp hike in July, a 50bp hike in September, and 25bp hikes in both November and December.