Your Last Minute FOMC Preview: Lowest Expected Market Move Since 2021 And A Trade Idea

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by Tyler Durden
Wednesday, Jun 14, 2023 - 05:03 PM

As we discussed in our lenghty FOMC preview, the broad consensus - among both economists and traders - is for the Fed to leave rates unchanged for the first time since March 2022 - market odds of a June hike are only 7%, vs 64% in July...

... while adding a tightening bias to today's communications. Specifically, JPM expects for Powell to communicate that a pause does not prevent the Fed from hiking further (hence a "hawkish skip"), as the Fed wants to see the impact of its 500bps of rate hikes. The key will be to see a slowing in both growth and inflation or else the Fed may resume its hiking cycle.