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MNI Fed Review - Sept 2022: Slightly Restrictive And Very Real

The FOMC continued to ratchet up its inflation-fighting message at the September meeting, with markets repricing expectations accordingly.

EXECUTIVE SUMMARY:

  • The FOMC continued to ratchet up its inflation-fighting message at the September meeting, adding more specific rate-setting contours to Chair Powell’s Jackson Hole speech via a hawkish Dot Plot.
  • Markets repriced accordingly, and several sell-side analysts raised their Fed hiking outlooks following the meeting. Another 75bp hike in November, with 50bp in December is now the baseline outlook, with a peak 2023 rate above 4.5%.
  • Powell's comments on what constituted "restrictive policy" both underlined that the Fed had a "ways to go" on rates versus the current "very lowest level of what might be restrictive", and suggested that the real rates outlook will be increasingly key in assessing how “restrictive” the Fed sees policy.

FOR FULL PDF ANALYSIS PLEASE USE THE FOLLOWING LINK:

FedReviewSep2022.pdf


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EXECUTIVE SUMMARY:

  • The FOMC continued to ratchet up its inflation-fighting message at the September meeting, adding more specific rate-setting contours to Chair Powell’s Jackson Hole speech via a hawkish Dot Plot.
  • Markets repriced accordingly, and several sell-side analysts raised their Fed hiking outlooks following the meeting. Another 75bp hike in November, with 50bp in December is now the baseline outlook, with a peak 2023 rate above 4.5%.
  • Powell's comments on what constituted "restrictive policy" both underlined that the Fed had a "ways to go" on rates versus the current "very lowest level of what might be restrictive", and suggested that the real rates outlook will be increasingly key in assessing how “restrictive” the Fed sees policy.

FOR FULL PDF ANALYSIS PLEASE USE THE FOLLOWING LINK:

FedReviewSep2022.pdf


Keep reading...Show less