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Lack Of Statement Surprises Reinforces Higher-For-Longer Narrative

FED

Along with the Dot Plot showing a much higher end-2024/25 rate than expected last quarter, the FOMC has shown no signs of shifting from its higher-for-longer message with a statement that tweaks descriptions of econ activity ("solid" rather than "moderate"), and while it notes job gains have "slowed" vs "been robust", they "remain strong".

  • The lack of forward guidance changes - while also largely expected - suggests they want to retain optionality to hike at least once more (which a majority of 12 participants in the Dot Plot see as their base case).
  • No dissents as expected.

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