The JP Morgan on Wednesday FOMC and Federal Reserve Chair Powell's press conference:
- FOMC went beyond just leaning into the soft-landing narrative—they are now forecasting only a trivial weakening in growth and labor markets next year and beyond.
- Given this very rosy outlook it's not surprising that the dots now project less easing in '24 and '25.
- Chair Powell's comments today, however, were less hawkish, as he stressed the conjectural nature of the dots. He also mentioned several times that the Fed will proceed "carefully" given how far they've come.
- Even with the more hawkish dots we're still comfortable thinking that the hiking cycle is over. We would be getting more concerned about the Committee walking into the policy mistake of overtightening if it weren't for the fact that the more influential members are likely less hawkish than the median dot.
