What to Expect From a Polarized FOMC
​The outcome of the September FOMC meeting was in line with MIG’s expectations: The Fed held the policy rate steady while sending the market a hawkish statement and dovish revisions to forecasts.
More importantly, the center consensus that has prevailed since spring dissolved. The FOMC went from being a divided committee to a highly polarized one as both hawks and doves hardened their positions.
While policy action in December remains our base case we are less certain of this. Â The meeting is nearly three months away and given the growing uncertainty around the economy, politics and monetary policy our crystal ball has turned foggier.
As for markets, MIG expects them to respond to the uncertain outlook with elevated volatility - that is, larger price movements but less conviction - until the crystal ball clears up.
MIG provides investors with clarity on markets, macro and monetary policy. It combines a rigorous analytical approach with unique insight into central banks based on over a decade of experience. Clients appreciate our clear and accessible communication style
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