Not waiting for Fed Chair Powell to speak at Jackson Hole (Friday 23rd August at 1400 GMT) Standard Chartered with a call on what to expect from the FOMC:
Fed funds target rate
- adding a 25bps cut in September (we expect two dissents again)
- We continue to forecast a cut in December, as well
Stan Chart citing:
- heightened trade uncertainty
- ongoing deterioration in global growth
US economic fundamentals remain solid, for now
- strong labour market and consumer spending
- However, both coincident and leading indicators from the goods sector have been deteriorating.”
“Core inflation remains below the FOMC’s medium-term 2% objective…
- we expect the policy stance to remain dovish until either trade and growth concerns abate, core inflation tops 2% or wage growth tops 3.5% y/y, roughly the latest cycle’s peak.”