- ANZ are forecasting dot polt cuts at the Federal Open Market Committee (FOMC) meeting next week
expect the FOMC will lower the 2023 and 2024 dot plot - dot plot could be cut by 50+bp
Saying that Fed Funds have not reached predicted levels even though inflation is lower
AND predict that:
- Powell will need to maintain hawkish guidance during the transition to lower growth and inflation so is likely to stress patience
- long run estimate for Fed Funds could rise
- extended moderation in inflation is raising confidence that aggregate price gains will return to target
- but progress on inflation is uneven across different cohorts and will take time to become balanced at 2.0%
- Inflation has performed better than the Federal Open Market Committee forecast in September
December Federal Open Market Committee (FOMC) meeting is on the 12th and 13th.
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