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TD: Powell Could Note Fin Conditions May Need To Re-Tighten

FED

TD notes that in the buildup to 2022's Jackson Hole symposium, Fed officials have signalled since the July meeting that the June Dot Plot is "still valid policy guidance for the near term".

  • In other words, "the Committee is in broad agreement to hike rates to at least the 3.25%-3.50% range before the end of the year" and TD is "of the view that the terminal rate is still above that level."
  • Powell's speech "won't ... bring a significant departure from his recent statements, likely emphasizing the Fed's data dependence and the need to hike further to bring inflation under control."
  • TD expects Powell to emphasize the recent easing of financial conditions and "suggest that the Fed may need to tighten policy further if financial conditions remain insufficiently restrictive."

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