Commenting on the Minutes of the Federal Reserve’s December policy meeting, TD Securities analysts They noted that officials continued to agree on the need to tighten monetary policy in the near term.
Rate hikes of 25 basis points are expected in March and May
“The focuses of attention for the Fed’s outlook on key interest rates in 2023 will be the pace of inflation based on basic PCE services, excluding housing, and the rigidity of the labor market. Since both stay away of trending inflation in line with the Fed’s target, the FOMC has raised its target federal funds terminal rate, and once it is reached, the Committee has no intention of moving away from it anytime soon, despite rising risks downward for growth prospects.”
“We expect another 50bp rate hike in February, and we anticipate 25bp rate hikes in March and May. So we expect the Fed to be in a range of fed funds rates between 5.25% and 5.50% in May”.
Source: Fx Street
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