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Jul 27 - 06:55 PM

USD: 75bps Was Well Telegraphed; 100bps Left On Th Table This Year Before A Pause In 2023 - CIBC

By eFXdata  —  Jul 27 - 03:06 PM

CIBC Research discusses its reaction to today's FOMC policy decision.

"While there are looming concerns over growth, the Fed has decided that in the battle against inflation, it will shoot first and ask questions later. The 75 basis point hike today was well telegraphed and a unanimous decision, and despite weakness in first half GDP, the central bank can take comfort in the fact that rates are still below levels that would typically be a key recession trigger. To justify this latest hike, the central bank had to dismiss the recent softening in spending and output data, and point to strength in employment," CIBC notes. 

"While a further 100 bps points seems to be left on the table for hikes this year, sluggish growth in the US and abroad, and a bit better progress against inflation ahead will, in our view, preclude it from continuing to hike in 2023 or reaching the median “dot” forecast of 3.8%," CIBC adds.

Source:
CIBC Research/Market Commentary

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