Thanks to everyone who responded to our survey. Please hit us back with feedback or questions you’d like to see asked – our goal is to help, after all.
Quick summary:
- 60% expect this Fed meeting to be “peak hawkishness”
- Are split on expectations for the market reaction, but think other people expect risk-off
Peak Hawkishness? 60% of the respondents to our survey expect today’s Fed meeting and press conference to be “peak hawkishness.” A slight majority of investors are still looking for the Fed to ease up soon despite stubbornly hot inflation and discouraging inflation internals…
…but rent is still a problem and core services inflation ex-rents is not behaving well. In the prior CPI reading, the apparent deceleration in core service inflation was almost entirely due to financial services prices, which are not well measured and heavily influenced by financial market developments. Expect Powell to pound the table that a prolonged period of below-trend growth is called for because the inflation issue is serious.
Data are actual to July and estimated for August
Given the hawkish inflation internals and that the Fed has ditched forward guidance for data dependence, it’s likely there will be persistent volatility in the Fed Funds curve. That’s not necessarily consistent with peak hawkishness.
Market Reaction: Investors are split on expectations for the market reaction to today’s meeting and press conference, but they think other people expect a risk-off outcome.
