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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
If the FOMC hikes 75bp next week - as should probably still be the base case - they are simultaneously likely to up the ante for the Nov and Dec meetings in recognition of persistently high inflation.
- Assuming no press leaks during the rest of the blackout period, the first signal of this will likely be the new Dot Plot. The June SEP showed a 3.4% year-end median rate. Assuming rates will be 3.1% after a 75bp raise next week, 3.4% implies only another 25bp increase in total in Nov and Dec combined.
- Market pricing is for a 4.1% year-end rate, a new cycle high, implying 100bp total hikes in both Nov and Dec. Along those lines, the main debate now for the dot plot median will likely be whether the FOMC takes it to 3.9% or to 4.1%.
- Note in June, the highest dot was a lone 3.75-4.00% - none of the 18 dots was above 4%. There will likely be several this time.
June 2022 FOMC "Dot Plot"Source: Federal Reserve
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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