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MNI

Test, Please Ignore

EUROZONE ISSUANCE

EGB Supply for W/C Jul 26

USDCAD TECHS

Pullback Considered Corrective

US TSYS SUMMARY

What a Short, Strange Trip It's Been

GLOBAL POLITICAL RISK

Pfizer, Moderna Jabs Retain High Trust; AZ, Sputnik Lower

AUDUSD TECHS

Trend Indicators Remain Bearish

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Credit Suisse sees a hawkish meeting: likely Powell will signal the FOMC sees further progress toward its goals and will likely begin to discuss a taper at upcoming meetings; and a hawkish shift in the dot plot.

  • Statement: Likely to acknowledge strength in economic activity and inflation running above 2%, but no change to fwd guidance.
  • SEP/Dot Plot: Median hiking dot unchanged for 2021 and 2022, but to move up by 50bp in 2023 to imply two rate hikes, as this would take only 3 dots to shift. [MNI's note: it's unclear whether CS is expecting those 3 shifting dots and others to move to substantially higher than 0.375%, which is what it would take to move the median to 0.625%). A few to move to one hike in 2022. 2021 GDP and inflation forecast shifted substantially higher; risks for 2022 are for slightly higher estimate (vs 2.0% currently). Unemp could move up slightly in 2021 but 2022/23 likely unchanged.
  • Press conference: Powell likely to signal taper discussion upcoming; the minutes of this meeting should be particularly interesting.
  • Future action: Recent strong inflation likely to trigger tapering discussion, "particularly for mortgages, where the market is extraordinarily tight."