UBS preview the December Federal Open Market Committee (FOMC) meeting coming up on the 12th and 13th.
UBS says that the December Summary of Economic Projections (SEP) that'll be issued alongside the Statement is likely to project at least one rate cut in 2024 and more likely two. The market has become gung-ho on FOMC rate cuts ahead (again) but UBS expect the Committee to be a little restrained.
- UBS expect the cumulative cuts the median FOMC participant assume to be appropriate to total roughly 250 (basis points) over the SEP forecast horizon.
- too early to declare victory on inflation
- when the FOMC does cut rates, they will likely continue to warn that if the progress on inflation is put at risk, further monetary policy tightening might be warranted
