On December 11th, analyst Anna Wong said: “I think this policy statement and the updated forecast are generally leaning towards being accommodative (dovish), but there are also hints of tightening (hawkish) embedded within. On the accommodative side, the committee has significantly raised its economic growth expectations, while inflation expectations have been slightly adjusted downward, and the 'dot plot' hasn’t changed. The Federal Open Market Committee also mentioned that it will start buying reserves.
On the other hand, there is a signal in the policy statement indicating that the committee intends to keep interest rates unchanged for a long time.” She continued: “Although the 'dot plot' shows only one rate cut in 2026, the market is guessing there will be two cuts; however, we believe the Federal Reserve will actually cut by 100 basis points next year. Why? Because we expect wage growth to slow down, and it doesn’t seem like inflation will suddenly spike again in the first half of 2026.”
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