• Notes from the Desk | FOMC Decision - Talking Tough

Notes from the Desk | FOMC Decision – Talking Tough Sept 22 2022


The Federal Reserve (Fed) delivered a 75bps rate hike, bringing policy rates into the 3.0-3.25% band.

The Fed’s median forecasts for overnight rates:


  • End of 2022 – 4.4%
  • End of 2023 – 4.6%
  • End of 2024 – 3.9%
  • End of 2025 – 2.9%


During the press conference, Chairman Powell pointed out that they expected the unemployment rate to rise next year.  He went on to say, that it was very important during a period of elevated inflation for the Fed not to ease too early.  Our read is that the Fed expects a mild recession is required to bring inflation down and will not be willing to ease even after a string of disappointing economic data unless inflation is on a sharp trajectory lower.



  • Treasury yields are moving to reflect the probability of a higher terminal rate.
  •  Markets should continue adjusting to a very high probability of a mild recession next year.
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