FX BANK FORECAST · COVERAGE
Aggregated year-end forecasts, scenario shifts, and curated analyst notes from 30 institutional desks. No promotion.
See how the Federal Reserve outlook moves the USD bank consensus across 30 desks
View Federal Reserve outlookFrom the original
If shorter run expectations go up, that’s alarming and the Fed might have to take steps There is no way the Fed can go back to the small balance sheet of 2008 The Fed wants to run an ample reserves type system Does not want to go to a scarce reserve system Has not spoken to Warsh
The desk believes the current rhetoric from the Federal Reserve reflects deepening uncertainty about policy decisions, particularly with regard to the resilience of the US labor market and its implications for monetary policy. Per the full note [source], Fed Governor Waller's gloomy commentary suggests that market participants are grappling with the likelihood of a rate cut in December, reflecting concerns about economic performance and consumer affordability. Concurrently, the tension between inflationary pressures, particularly those induced by tariffs, and the Fed's need to support employment results in a complex economic landscape. A focus on these dynamics indicates that traders should remain vigilant as inflation projections rise into early 2024, which could influence currency positioning and volatility.