Standard Chartered with the wrap.
Data dependent, but not yet ready to call a peak
Rates pricing for the 20 September FOMC is as flat as flat can be, reflecting soft US inflation and mixed activity. We expect the FOMC to show one more 2023 hike, in line with the June Summary of Economic Projections (SEP). However, to maintain a proper hawkish tone, we expect the FOMC to remove one of the 2024 eases. The fed funds futures market prices just under a 50% risk of one more 2023 hike and 90bps of rate cuts in 2024, so our SEP expectations area bit more hawkish than what rates markets are pricing, in our view.