Wall Street Forecasts Further Fed Rate Hikes Amid Tightening Stance

Following the Federal Reserve's September Federal Open Market Committee (FOMC) meeting, which displayed a more hawkish stance than anticipated, Wall Street has seen an expansion of expectations for further interest rate increases.

According to Walter Bloomberg on September 17 (local time), Goldman Sachs, Morgan Stanley, NatWest, Rabobank, Swedbank, and Commerzbank have either incorporated the prospect of additional Fed rate hikes into their forecasts or reduced their expected range for future rate cuts.

The median market expert forecast now anticipates one more 25bp rate hike by the Federal Reserve. However, opinions are divided on whether this increase will occur in October or December. One basis point equals 0.01 percentage points.

Conversely, Citigroup and ING, along with SEB, have maintained their previous stance that the September rate hike marked the final increase of this tightening cycle.