MNI Fed Review - Sep 2023: Economy Too Strong For Comfort

We've just published our review of the Fed's September meeting, including 27 sell-side analyst summaries.

• The FOMC’s September meeting decision was a “hawkish hold”, with the communications making clear that “higher for longer” now means “longer” if not “higher” than the FOMC thought a few months ago.
• The Fed’s shift was based on much stronger-than-expected economic growth in recent months, not renewed concerns about inflation per se, with Chair Powell calling a soft landing a “primary objective” though not necessarily his base case.
• Markets took the message seriously, with 2024 rate cut expectations pulled back sharply.
• However, the FOMC’s data-dependent approach still leaves upcoming decisions in the balance, with softening inflation opening the door to a rate hold through end-2023 versus the hike in the Dot Plot.