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FED
On rate hikes: The June SEP 'dot plot' seems a little out of date at this point, but for what it's worth, 7 FOMC members saw hikes starting in 2022, and 6 more in 2023.
- Only 5 saw rates being held through 2023 in the June SEP: that probably includes 5 of Powell, Williams, Brainard, Clarida, Daly, Evans, and Kashkari.
- The 7 2022 hikers include Kaplan, Rosengren, Bullard, and Bostic (they've explicitly said so), and probably George.
- Of the remaining 6: Quarles, Bowman, Mester, Waller, Harker and Barkin: Mester and Barkin appear to lean hawkish so probably would be relatively open to 2022 hikes, data permitting.
- Waller said prior to the July FOMC he was looking for a 2023 hike, but if anything he's become more hawkish since then (and said in June he wouldn't rule out a 2022 hike). Harker has also said he saw 2023 liftoff, but we haven't heard from him since before the July FOMC.
- Based on these assumptions, it's quite plausible we will see a 9-9 FOMC split on the 2022 liftoff dots at the September meeting (in favor: Kaplan, Rosengren, Bullard, Bostic, George, Waller, Harker, Mester, and Barkin).
- The 2023 or later group will probably still contain the "center" of the committee though, and will be considered the more influential: Powell, Clarida, Brainard, Williams, plus Quarles, Bowman, Daly, Evans, Kashkari).
June 2021 Fed Dot PlotSource: 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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