Fra BNP Paribas
US: We expect the Fed to hike rates on Wednesday On Wednesday (at 2pm EST), the US Federal Open Market Committee (FOMC) will announce its decision on interest rates, release a policy statement and publish a new set of economic and interest-rate projections. Chair Janet Yellen will hold a press conference half an hour later (2.30pm EST).
We expect the rate decision to be a close call, but our base-case scenario remains a 25bp increase in the federal-funds target range to 0.50-0.75% from 0.25-0.50%. On 20 July, we moved to an out-of-consensus forecast of a September hike due to the waning of global risk, the easing of monetary and financial conditions and better domestic data, especially on the labour market (see US Federal Reserve: The return of the hike).
Since then, the data have, with a few exceptions, remained supportive of our view and external risks to the economy have diminished (see US FOMC: Push comes to shove). The three-month average gain in payrolls stands at 232,000 – a rate that is more than double the median rate the Fed
