Brown Brothers Harriman’s Elias Haddad notes the FOMC is widely expected to keep the Fed funds target range unchanged at 3.75-4.00%, with futures pricing only a small chance of a move. However, a likely 9-3 vote split and Chair Kevin Warsh’s inflation assessment should keep a December hike in play, leaving robust US data and price pressures supportive for the Dollar.
TD Securities’ Oscar Munoz and Eli Nir expect the FOMC to keep the Fed Funds Rate at 4.00% in October, validating current market pricing while avoiding fresh forward guidance.
TD Securities strategists note that FX markets remain meaningfully long the US Dollar (USD) ahead of the October FOMC, with data showing the Fed faces the strongest G10 hiking pressures.