On the macro front, the FOMC meeting on July 28–29 is now in the countdown stage. This will be the second interest-rate decision chaired by Waller since taking office.
Notably, Waller has, against expectations, kept his cards close to his chest regarding the Federal Reserve’s next move.
At last week’s two-day congressional hearings on Capitol Hill, he made it clear that he has zero tolerance for persistently high inflation, vowing that the era of high inflation that has plagued the past five years will become a thing of the past.
However, on the key question of whether to support an immediate rate hike, he has never sent a clear signal.
According to CME data:
The probability that the Fed will keep rates unchanged in July is 85.6%.
The probability of a total 25-basis-point rate hike by September is 53.5%.
The probability of a total 50-basis-point rate hike by September is 7.9%.
Bank of America Global Research’s U.S. Economic Research Director said that Waller can “easily secure enough votes in the FOMC to push for a rate hike.”
The June dot plot already shows that nine officials expect at least one rate hike this year, while six expect more than one.
Thirteen’s take: The biggest highlight of the July FOMC is no longer whether there will be a rate hike, because in all likelihood there won’t be.
The real focus is on how the dot plot will change—and whether Waller will break his silence at the press conference.
With a 53.5% probability of a rate hike in September, the market is still pricing in the possibility of a hike.
Notably, Waller has, against expectations, kept his cards close to his chest regarding the Federal Reserve’s next move.
At last week’s two-day congressional hearings on Capitol Hill, he made it clear that he has zero tolerance for persistently high inflation, vowing that the era of high inflation that has plagued the past five years will become a thing of the past.
However, on the key question of whether to support an immediate rate hike, he has never sent a clear signal.
According to CME data:
The probability that the Fed will keep rates unchanged in July is 85.6%.
The probability of a total 25-basis-point rate hike by September is 53.5%.
The probability of a total 50-basis-point rate hike by September is 7.9%.
Bank of America Global Research’s U.S. Economic Research Director said that Waller can “easily secure enough votes in the FOMC to push for a rate hike.”
The June dot plot already shows that nine officials expect at least one rate hike this year, while six expect more than one.
Thirteen’s take: The biggest highlight of the July FOMC is no longer whether there will be a rate hike, because in all likelihood there won’t be.
The real focus is on how the dot plot will change—and whether Waller will break his silence at the press conference.
With a 53.5% probability of a rate hike in September, the market is still pricing in the possibility of a hike.