FOMC dot plot from the September 2021 meeting

9:28 PM September 22, 2021

As expected, the Fed does not change its policy and does not start tapering. In the statement, however, we have an indication that if progress continues, tapering should begin soon (this means an announcement probably in November or December).

However, the Fed changes its macro forecasts! Here we already have a chance for a raise in 2022!

The median for the increases moves to 2022 and points to one increase. We have 10 members who are in favor of a rate hike and 10 members are in favor of keeping rates at the current level. Some, of course, want more than one raise. Inflation projections strongly increased for the current year, but barely changed for the following years. Lower economic growth for the current year and clearly increased for the next year. Source: Fed

Here we have a 50:50 split for the rate hike and for maintaining the current policy next year. Big changes also in 2023! 4 increases are expected by 2023. Only one person sees no change. We also have the first forecasts for 2024. Here, the median is 1.8%. Long-term median unchanged at 2.5%. Source: Fed

Interesting dollar reaction. The dollar is losing despite expectations of a rate hike already next year. However, the market may have been looking for tapering, and the Fed does not see the problem with inflation and for now wants to wait for further progress in the economy. Currently, a key resistance in the form of a downtrend line is being tested. Source: xStation5

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