Fed Preview: Hike expected, focus switches to 2019The Fed is widely expected to raise the target range for the federal funds rate to 2.00 to 2.25 per cent at its meeting on Sep 25-26. Guidance has proved successful and as usual there is little uncertainty surrounding the actual rate decision. Markets will focus on updated economic forecasts and their implications for monetary policy in 2019. However, there is little scope for the Fed to revise current economic projections and the central bank’s median forecast for the rate path is unlikely to change.
With strong economic activity and inflation pressure continuing to build, we expect the central bank to follow up a September hike with another in December and two more in 2019 (March and June). However, trade tensions are a downside risk for 2019. Any specific refer ... |