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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
None of the 30 sell-side analysts whose previews MNI read for our Sept FOMC Preview expect the Fed to make a formal taper announcement at the September meeting. Instead, focus is on the Fed's signalling of a taper later this year, and the new projections.
- There's widespread expectation that the Statement will include a change to the language implying that a taper will be announced later this year, but falling short of specifying November's meeting.
- The vast majority of analysts expect a November taper announcement, with a tapering pace of $15B per meeting (proportional between $10B Tsy / $5B MBS), with rate liftoff in 2023.
- On the projections, most anticipate 2021 GDP growth to be revised down with inflation revised up, but there are only minor changes foreseen to the rest of the economic forecasts.
- But expectations for the Fed funds rate 'dot plot' vary: only a few (JPMorgan, Citi, Danske) see a rate hike in the 2022 median dot, while cumulative 25bp hikes by end-2024 in the dot plot range from 4 (to 1.125%), to 7 (NatWest, to 1.875%).
- The 'median of median' expectations are 0.75% in 2023 (between 2 and 3 hikes by end-2023), and 1.625% in 2024 (representing 3 to 4 2024 hikes). The table shows expectations for the SEP Dot Plot, plus analysts' expectations for Fed taper start / pace / rate liftoff (where available):
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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