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VIEW: J.P.Morgan Don’t See A 75bp Hike In Nov

FED

J.P.Morgan note that given the Fed’s new forward guidance “we revise our Dec Fed call from 25bp to 50bp, with terminal expected at 4.50% early next year. Of course we could get 75bp at the Nov meeting instead of our expected 50bp, but Powell’s prepared remarks did not tease that for the next meeting the way his July prepared remarks did, so we think we’d need to see stronger-than-expected data to get 75.”

  • “The new economic forecasts are not only more hawkish but somewhat more realistic, as they now recognize at least some labor market weakness will be needed to get inflation down. Even so it’s still close to an immaculate disinflation, as only a whiff of labor market weakness generates a very sizable decline in inflation.”
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J.P.Morgan note that given the Fed’s new forward guidance “we revise our Dec Fed call from 25bp to 50bp, with terminal expected at 4.50% early next year. Of course we could get 75bp at the Nov meeting instead of our expected 50bp, but Powell’s prepared remarks did not tease that for the next meeting the way his July prepared remarks did, so we think we’d need to see stronger-than-expected data to get 75.”

  • “The new economic forecasts are not only more hawkish but somewhat more realistic, as they now recognize at least some labor market weakness will be needed to get inflation down. Even so it’s still close to an immaculate disinflation, as only a whiff of labor market weakness generates a very sizable decline in inflation.”