A Fed Pause in Oct Could Signal no Predetermined Hiking Cycle
Dow Jones09-24 13:13
0513 GMT - The Federal Reserve's 12-0 vote in support of the 25-basis-point rate hike last week "should perhaps be followed by a pause next month," First Abu Dhabi Bank's Simon Ballard says in a note. "Yes, the unanimous decision to hike this month sends a clear message of 'more tightening to come'," the chief economist says. However, First Abu Dhabi Bank believes that a pause at the next Federal Open Market Committee meeting in October would convey the subliminal message that, while the Fed is committed to bringing inflation back toward target, it is not intending to embark on a predetermined tightening cycle, Ballard says. Money markets are pricing a 71% probability of a 25bp hike in October, according to LSEG.
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