MUFG rates strategist John Herrmann eyed....>

US VIEW: MUFG rates strategist John Herrmann eyed "likely outcomes" at 2pm FOMC

Mtg as his models "forecasts for the FOMC's Press Statement announcement and SEP

Projections include:"

- 1) A 25 bps hike to 1.25% to 1.50% for the range of the federal funds trgt

rate,

- 2) One dissenter (Kashkari) possibly more (eg, Evans or Brainard),

- 3) "A more upbeat assessment of GDP growth, consumer spending, business

investment spending and payroll growth,"

- 4) "Risks to the outlk characterized as "roughly balanced" or "nearly

balanced" - possibly simply "balanced,"

- 5) Hermmann expects on SEP Projections: "U3 unemployment rate of 3.8% in 2019

and 4.0% in 2019," "GDP growth of +2.60% for 2017, +2.60% for 2018, +2.20% in

2019 and +2.00% in 2020," "PCE inflation of +1.7% in 2017, +1.8% in 2018, +1.90%

in 2019,"

- "Median" interest rates of 3 hikes in 2018, 2 hikes in 2019, one hike in 2020

and a 2.75% terminal rate."