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The Fed: Look Forward or Risk a Hawkish Mistake
Will the Federal Reserve take a hawkish turn at its next meeting ending on 26 September? There are signs it may. Although we expect the Fed to hike rates by 25 basis points, to 2.0% to 2.25%, that’s not our concern. Rather, there is growing evidence that some (not all) Federal Open Market Committee (FOMC) participants are de-emphasizing forward-looking projections when assessing the near-term path of monetary policy, preferring instead to focus on incoming economic data. The continued gradual pace of hikes currently prescribed by that approach is OK when the federal funds rate is still below the range of estimates ... (full story)