TD Research discusses its expectations for next week's FOMC policy meeting.

"We expect a 25bp rate hike at next week's FOMC meeting taking the Fed funds target range to 4.50%-4.75%, and raising the IOER and RRP rates to 4.65% and 4.55%, respectively. The move would be the second consecutive downshift in hiking pace by the Fed. Despite this, we expect that post-meeting communication to emphasize that the Fed is not done yet in terms of further tightening of its policy stance, and signal that more rate hikes are still in the pipeline," TD notes. 

"FX: Barring a 50bp hike or a conditional commitment to stop tightening, the bar is high to flip the switch on the status quo. USD is stretched and oversold, but the catalyst for a reversal is absent. This Fed meeting will not be that catalyst as FX markets are not as sensitive to central bank repricing as they used to be a few weeks back," TD adds.