Timiraos: Fed 'barreling toward' a 75 bps hike in November

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Timiraos: Fed 'barreling toward' a 75 bps hike in November

<p>WSJ Fedwatcher Nick Timiraos is out with his <a href="https://www.wsj.com/articles/fed-set-to-raise-rates-by-0-75-point-and-debate-size-of-future-hikes-11666356757" target="_blank" rel="nofollow">latest </a>and says:</p><p>"Federal Reserve officials are barreling toward another interest-rate rise of 0.75 percentage points" and whether to signal a smaller hike in December.</p><p>He highlights a divide in the Fed with some wanting to slow the pace of hikes and others worried that inflation isn't falling.</p><p>"Fed policy makers face a series of decisions. First, do they raise rates by a smaller half-point increment in December? And if so, how do they explain to the public that they aren't backing down in their fight to prevent inflation from becoming entrenched?"</p><p>The market is 93% priced for a 75 bps hike with the remainder on 100 bps. But the market is taking a dovish read on this report as it highlights the potential for a slowdown later. </p><p>The US dollar has given back some gains and that shows:</p><ol><li>USD longs are a crowded trade</li><li>Timiraos has a lot of credibility with markets</li></ol><p>That said, the article doesn't read like any kind of signal to me. It highlights the divisions at the Fed and the data that officials will need before making a decision at the December FOMC. The content of the article is also less dovish than some of the headlines coming out of it.</p><p>Is it also possible the BOJ attempted to stomp on USD/JPY at the same time?</p>

                This article was written by Adam Button at forexlive.com.

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