###POV: FED SEP HIKE ON TRACK 'FOR NOW' -.......>

FED: ###POV: FED SEP HIKE ON TRACK 'FOR NOW'

- With the market pricing in just a 6% chance of a hike at Wednesday`s FOMC

according to MNI PINCH, the meeting is unlikely to result in anything beyond

maintaining expectations for a September hike, which appears nailed on at 95%.

- No press conference with Chair Powell and no new set of economic projections

means focus is entirely on the accompanying statement.

- Apart from nods to recent GDP and labour market strength, it is unlikely to

change much, given major amendments in the past two statements and few key

developments since the June meeting. Muted market reaction is therefore likely.

- Dovish: Notes downside risks to economic outlook from tariffs/trade war.

Includes 'for now' in reference to gradual rate hikes being appropriate (as per

Powell's Congressional testimony in July).

- Impact: Odds of hikes in Sep and Dec (70% on MNI PINCH) fall, curve steepens.

- Hawkish: Very bullish on GDP and employment data, and mentions upside impact

of fiscal policy. Potentially mentions hiking beyond neutral rate.

- Impact: Probability of December hike rises sharply, curve flattens.