US: Monetary and fiscal policy tango – ANZ

Research Team at ANZ, notes that the consensus expectation remains that the FOMC won’t move its economic forecasts or interest rate projections meaningfully at today’s announcement or at least until it becomes clear what Donald Trump’s actual fiscal agenda is.

Key Quotes

“Overnight, Senior Republicans pushed back against an aggressive fiscal package, saying that debt levels were already at dangerous levels. They argued for deficit neutral tax cuts and noted the need for private sector involvement in infrastructure. The apparent pushback against Donald Trump’s campaign agenda adds to expectations that the FOMC will remain cautious for now. The market is anticipating a 25bp hike today and is pricing a 66% chance of another increase before June next year.”