Credit Agricole CIB Research discusses its expectations for this week's FOMC policy meeting.
"We expect a second consecutive 75bp hike from the Fed at the July FOMC. This would bring the target range to 2.25-2.50%, matching the median neutral estimate from the June dot plot. This would represent the Fed moving “expeditiously” to neutral, with the 75bp increment an aggressive pace that had not been seen since 1994 prior to the June meeting," CACIB notes.
"An upside surprise in the scorching June CPI report had raised the possibility of an even larger 100bp hike, though we view a move of this magnitude as unlikely at this point given the pushback from Fed speakers. Markets currently price around 80bp of tightening, implying a chance of roughly 20% for a 100bp hike," CACIB adds.