• Notes from the Desk | FOMC Meeting - A Tweak Away

Notes from the Desk | FOMC Meeting – A Tweak Away July 26 2023

Notes From the Desk: FOMC Meeting – A Tweak Away


As widely expected, the Federal Reserve (Fed) hiked 25bps, bringing the fed funds into a range of 5.25-5.5%.  The press release was almost a carbon copy of the one issued at the last meeting, suggesting that the committee’s views have not materially changed.

During the press conference, Chairman Powell made it clear that further moves would be data-dependent and decided on a meeting-by-meeting basis.  He pointed out that cooling inflation was a welcome relief; however, the labour market remained far too tight.

In our opinion, the Fed is still leaning towards erring on the side of higher rates in its fight against inflation.

We thought the most important revelation during the press conference was that the Fed is no longer calling for a recession.  It appears that the rally in US equities might not be so puzzling after all.



  • Employment data is likely to dictate the Fed’s next move.
  • With the end of hikes nigh, the bond market will be preoccupied with when rate cuts could start (currently expecting spring 2024)
  • Yields should continue trading sideways.
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