- With labor market on a somewhat better footing, mon pol can focus on a timely return to prices stability, especially after five years of too high inflation
- While the upside risks to inflation have increased, labor market conditions seem a bit stronger
- Now see an increased likelihood of future scenarios in which inflation remains notably above 2%
- Supported hike last week
- “Somewhat more restrictive” Fed funds rate will help ensure that inflation durable returns to target
So that begs the question, what is ‘somewhat more restrictive’. The Fed funds curve prices in a bit more than three further rates hikes, basically at the cadence of every second meeting. The October 28 meeting is priced at just over 50%.
This article was written by Adam Button at investinglive.com.