Weekly: Central Bank Watch
This is the first edition of a new product from our Economics team, ‘Central Bank Watch’, that focuses on central banks and monetary policy.
In this report, we focus on the Fed, which is facing a conflicting set of developments as it approaches next week’s meeting.
The US economy remains resilient and the inflation data have been slightly less encouraging, but the sharp rise in UST yields complicates the Fed’s response, with recent commentary indicating another hawkish pause is likely. Continued resilience could trigger another hike in December or 1Q24; it might also influence the FOMC’s estimate of ‘neutral’.