USD: Hawkish Fed Set To Hike In December - SEB

SEB Research comments on today's FOMC September policy decision.

"The Fed maintained the target range for the federal funds rate at 1.00-1.25 per cent at the FOMC meeting that concluded today. The Fed also decided to start normalising the size of its balance sheet in October. The vote was unanimous. The dollar strengthened following the release of the statement and market pricing indicates that the probability of another rate hike this year rose above 50 per cent.

Today’s statement makes us feel more confident that the Fed will indeed hike in December. We predict three more hikes in 2018 and one hike in 2019. There is still plenty of uncertainty, however, and another bout of inflation weakness could make the Fed hesitate,' SEB argues.

Source: SEB Research