**As seen in Risk In The Week report 10/27/23, subscribe at cablefxm.co.uk/reports
Back in September, the Fed held the policy benchmark in the 5.25% - 5.50% target range, this was the second hold after the FOMC started its 525bps tightening cycle back in March 2022. Investors anticipated the September meeting for a fresh batch of forecasts in the SEP, and desks debated whether the board would adjust dot plot projections for this and next year. The SEP showed the 2023 median rate forecast unchanged at 5.6% while 2024 was lifted by 50bps to 5.1%. Additionally, 2023 inflation and growth projections were revised higher, and unemployment was lowered across the forecast horizon. The statement mentioned that job gains have slowed, but the labour market remains strong, the line where the FOMC says there may be additional policy firming stayed in the communication. During the presser, Powell said that the FOMC was ready to lift rates further if appropriate, he also said that the level of the neutral rate may be higher. Powell also mentioned that the FOMC's primary objective is for the economy to achieve a soft landing, however, he warned this wasn't their base case scenario. Analysts at Rabobank said the FOMC is likely to remain on hold in November while they repeat their data-dependant rhetoric and stress to proceed carefully. During the presser, Rabo expects Powell to keep the door open to a rate hike in December, however, they see Treasury yields rising further and doing the Fed's work. Rabobank said the focus will shift from the level of rates to how long will they stay at restrictive levels.
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