Analysts at ING point out that markets are broadly expecting a 25bp rate rise on Wednesday and they expect the same as the US economy is booming, inflation is at or above the 2% target and the jobs market is finally generating wage pressures.
Key Quotes
“The outlook for policy in 2019 is more uncertain. Back in September the Federal Reserve “dot diagram”, which shows the individual predictions of FOMC members, pointed to a median expectation of three 25bp rate rises next year with a further 25bp hike in 2020. Market participants are increasingly sceptical of this with Fed funds futures contracts no longer even fully pricing in one hike in 2019.”
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