The Federal Reserve hiked its Fed Funds again on Wednesday:
Via Westpac (in brief), their assessment:
- FOMC to assess policy one meeting at a time
- With the downside risks to growth now believed to be as significant as inflation’s potential upside, the FOMC are beginning to look beyond the tightening cycle.
- There is nothing in July’s meeting communications to dissuade us from the view that the 5.375% rate reached today will prove the peak fed funds rate for this cycle. Further, Chair Powell’s guidance on the lags with which policy impacts also supports our expectation that the first cut is likely to be seen in March 2024 and be followed by a sizeable cutting cycle to mid-2025, to a broadly neutral level of 2.625%. Capacity constraints, particularly for housing, are the chief risk to these views.
This article was written by Eamonn Sheridan at www.forexlive.com. Source