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NatWest: Liftoff In Q4 2022

FED

NatWest points to the November FOMC statement's tone on inflation as important to watch.

  • In terms of communications, NatWest expects two statements to be released simultaneously at 1400ET: "The first will be traditional policy statement, while the second will be a new statement regarding the reduced pace of asset purchases that will include all of the technical details."
  • Statement: No major change in tone in overview of current activity; could sound a little less upbeat.
  • Much more important whether they change the tone around inflation.
  • Press conference: Powell to emphasize that the criteria for liftoff are very different from those for taper. To reiterate "flexible in the months ahead" and will "need to make sure that our policy is positioned for a range of possible outcomes."
  • Future action: Liftoff in Q4 2022 (previously was Sep 2023), with 1 hike in Q4 2022, 4 hikes in 2023.

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