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Sell-Side Analysts Realign Views With Powell's Guidance (1/2)

FED
Fixed IncomeBulletMarketsEmerging MarketsForeign Exchange

A slew of changes for sell-side expectations in the wake of Wednesday's Powell press conference guiding to consecutive 50bp hikes in June and July. Though for the most part, the terminal rate expectations are unchanged:

  • BNP: Now expect four consecutive 50bp hikes through September before falling back to a 25bp hiking pace (previously had seen 25bp in Jul and Sep). Their terminal rate view of 3.00-3.25% is unchanged.
  • Goldman Sachs: Revised up July FOMC forecast to see a 50bp hike, vs 25bp expected previously. But they’re not making further changes beyond July, though another 50bp in September looks possible. They have not changed their terminal rate forecast of 3.00-3.25%, but we now see that by 2023Q2 (vs. 2023Q3 previously).
  • Morgan Stanley: Sees the Fed on course for 50bp hikes at the next 2 meetings, vs a previous expectation that July and beyond would only see 25bp raises. They expect end-2022 rates of 2.625%.
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A slew of changes for sell-side expectations in the wake of Wednesday's Powell press conference guiding to consecutive 50bp hikes in June and July. Though for the most part, the terminal rate expectations are unchanged:

  • BNP: Now expect four consecutive 50bp hikes through September before falling back to a 25bp hiking pace (previously had seen 25bp in Jul and Sep). Their terminal rate view of 3.00-3.25% is unchanged.
  • Goldman Sachs: Revised up July FOMC forecast to see a 50bp hike, vs 25bp expected previously. But they’re not making further changes beyond July, though another 50bp in September looks possible. They have not changed their terminal rate forecast of 3.00-3.25%, but we now see that by 2023Q2 (vs. 2023Q3 previously).
  • Morgan Stanley: Sees the Fed on course for 50bp hikes at the next 2 meetings, vs a previous expectation that July and beyond would only see 25bp raises. They expect end-2022 rates of 2.625%.