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Morgan Stanley Research discusses its expectations for this week's FOMC policy meeting.
- "We expect the FOMC to deliver a fourth 75bp rate hike at its November meeting, and indicate that it could soon be appropriate to step down the pace of hikes. We continue to expect the Fed to step down to 50bp in December and 25bp in January, reaching a peak rate of 4.625%. The market is expecting either a 50bp or 75bp hike at the December meeting, and so there's not much the Chair has to do to maintain that flexibility," MS notes.
- "The incoming data between the November and December meetings can then guide the Fed on the appropriate size. While Chair Powell talks up the likelihood of stepping down the pace now that the Fed has moved further into restrictive territory, we expect that he will stress that the Committee's view of how high the peak rate may be remains the same - in the range of -4.5-5.0%. Any step-down should not be conflated with less appetite to get the policy rate higher," MS adds.
Dates ahead for the FOMC:
