MUFG on FOMC
The FOMC is very likely to remain on hold but the OIS indicates close to 10% probability of a hike. A hold would likely be accompanied by a statement similar to the statement in September when the FOMC hiked underlining the fact that the economy remains resilient. There is a risk that there could be some dissents and that would certainly be one signal of the leaning and would strengthen the market’s conviction of a hike in December. A December hike is close to fully priced. If the press conference is similar in tone to previous public engagements by Chair Warsh he is likely to come across as hawkish. We certainly don't expect anything explicit in regard to a policy decision in December but we can expect Warsh to emphasise the determination of the FOMC to meet its price stability objective.
The FOMC is very likely to remain on hold but the OIS indicates close to 10% probability of a hike. A hold would likely be accompanied by a statement similar to the statement in September when the FOMC hiked underlining the fact that the economy remains resilient. There is a risk that there could be some dissents and that would certainly be one signal of the leaning and would strengthen the market’s conviction of a hike in December. A December hike is close to fully priced.
If the press conference is similar in tone to previous public engagements by Chair Warsh he is likely to come across as hawkish. We certainly don't expect anything explicit in regard to a policy decision in December but we can expect Warsh to emphasise the determination of the FOMC to meet its price stability objective.