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

FED

More forecast revisions:

  • UBS: Expects a 50bp hike in July vs previous expectation of a 25bp hike: “The information likely to be in hand headed into the July meeting seems unlikely to deter the momentum to front load normalization.” After that, they stick to their view of 25bp raises in Sep/Nov/Dec to a terminal 2.50-2.75% rate.
  • Nordea: “will have another look at our forecast for 2022 rate hike in light of the chairman’s message at the press conference”: they had seen 50bp hikes in May and June, and 25bp at the remaining 4 2022 meetings.
  • Rabobank: Raised their July rate hike forecast to 50bp from 25bp, but “still hesitant about doing the same for September, given our downbeat outlook” for growth. They still see rate cuts by the end of 2023.
  • Swedbank: Now sees 50bp hikes in June and July, whereas it had seen 25bp at those meetings previously. It still sees 25bp raises thereafter, but with a higher terminal rate (3.00-3.25%, vs 2.50-2.75% previously) in March 2023.

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