Bank of America Global Research discusses its expectations for next week's FOMC policy meeting.
"We expect the Fed to raise its target range for the federal funds rate by 50bp in December to 4.25-4.5%. Fed communications over the last few weeks have clearly telegraphed this move. The more important question is where the Fed goes next," BofA notes.
"Dots to shift higher again: We expect the median forecast for 2023 to move up by 50bp to 5.125%, consistent with our terminal rate. We think the dot plot will then point to 100bp of cuts each in 2024 and 2025. The macro projections in the SEP should be revised to show lower GDP growth and inflation than in September, and higher unemployment.
"Press conference: no pivot. We expect Chair Powell to push back against easing in financial conditions and remind investors that a slower pace of hikes does not mean a lower terminal rate, and the Fed's job is far from done," BofA adds.