Synopsis:

CIBC provides its perspective on the latest FOMC decision, pointing out the unchanged interest rates and the emphasis on the term "resilience" to depict the current US economic scenario. Based on the current trends and the statement's content, CIBC expects another rate hike by the Fed in December.

Key Insights:

1. Status Quo on Interest Rates: The FOMC has chosen to maintain the status quo, leaving the ceiling on the fed funds range at 5.50%.

2. Highlighting Economic Resilience: The US economy has shown marked resilience lately, especially noted by the surge in consumer spending and positive momentum in the labor market.

3. Acknowledging Economic Strength: The FOMC statement recognized the strength displayed by the US economy and made a nod to tightening financial conditions.

4. Data-Dependent Approach: Staying consistent with previous communication, the statement retains its data-dependent nature, ensuring that the door remains open for further rate adjustments based on evolving economic conditions.

5. Projection for December: CIBC projects a 25bps rate hike in December. This expectation stems from the gathering evidence of a robust US economy. Given the policymakers' inclination to err on the side of being proactive against inflation, CIBC believes this hike will be a move towards reaching the terminal rate.

Conclusion:

While the recent FOMC decision maintained interest rates, CIBC emphasizes the statement's acknowledgment of the US economy's resilience. The bank anticipates further tightening in December, seeing it as a necessary measure to counter inflationary pressures in the context of a strengthening economy.