Wall Street Boosts Calls for Another Fed Rate Hike After Hawkish September FOMC, Some Banks Revise Forecasts
Summary
- The Federal Reserve’s September Federal Open Market Committee (FOMC) meeting was more hawkish than expected.
- Goldman Sachs, Morgan Stanley and others either added another Fed rate hike to their forecasts or reduced the expected scale of future rate cuts.
- The median forecast among market experts is that the Fed will raise its benchmark rate by another 25bp.
Forecast Trend Report by Period
The Federal Reserve’s September Federal Open Market Committee meeting struck a more hawkish tone than expected, fueling a broader shift on Wall Street toward forecasts for another rate increase.
Walter Bloomberg reported on September 17 that Goldman Sachs, Morgan Stanley, NatWest, Rabobank, Swedbank and Commerzbank have either added another Fed rate hike to their forecasts or scaled back how much easing they expect later.
The median view among market experts is that the Fed will raise its benchmark rate by another 25 basis points once more. Opinion is divided, however, on the timing of any additional move, with some pointing to October and others to December. One basis point equals 0.01 percentage point.
By contrast, Citi, ING and SEB maintained their existing view that September’s rate increase was the last of the current tightening cycle.
