Timiraos has been a sort of Fed whisperer as of late, so it is something to follow in case his remarks or views have any juxtaposition with prevailing market sentiment. Think back to how markets used to follow Hilsenrath when it came to Fed commentary.
In any case, this is the latest by Timiraos and it makes for an argument that while the Fed could slow down their pace of tightening this month, policymakers could allude to higher rates next year - more than what investors are expecting now.
A 50 bps rate hike seems to be what policymakers are favouring next week and that is what markets are expecting already at the moment. However, the infamous dot plots is going to be a major focus point and Timiraos says that "elevated wage pressures could lead them (Fed) to continue lifting it (interest rates) to higher levels than investors currently expect".
The September projections showed that most policymakers saw rates rising towards 4.50% and 5.00% next year but that 'landing zone' could be lifted towards 4.75% to 5.25% in next week's latest projections.
You can view the full report here (may be gated).
In any case, the bond market reaction is the one to watch in my view and over the past few weeks, a less hawkish stance has seen rates fall considerably to reach near a critical juncture as noted here. If bond traders interpret the Fed's outlook as one that is still leaning more towards the hawkish side, the dollar could yet catch a much needed break heading towards year-end; vice versa.
