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Deutsche Bank: Nod toward November taper annc all things equal. DB expects the "Committee to reduce Treasury and MBS purchases by $10bn and $5bn per month, respectively.

  • "The Committee's near-term economic forecasts were in line with expectations, with growth marked down substantially this year and inflation revised higher. However, officials also raised their inflation projections across the forecast horizon, due in part to more persistent bottlenecks, and Powell's comments on inflation leaned hawkish relative to his Jackson Hole discussion. This higher inflation profile justified officials being evenly split on raising rates next year.
  • The gradual tightening cycle envisioned in the dots despite a persistent inflation overshoot indicates a somewhat higher tolerance under the Fed's flexible average inflation targeting (FAIT) framework that could be consistent with a longer look-back window. What is clear is that inflation is likely to be the determining factor for liftoff and the pace of rate hikes. If inflation is at or below the Fed's current forecast next year of 2.3% core PCE, liftoff is likely to come in 2023, consistent with our view. However, if inflation proves to be higher with inflation expectations continuing to rise, the first rate increase could well migrate into 2022."