Standard Chartered is out with a note forecasting a signficantly more hiking from the Federal Reserve.
"We see the FOMC moving by 75bps at the September meeting (previously 50bps) and 50bps (previously flat) at the November meeting and then holding through 2023," they write.
Shifting forecasts ahead of tomorrow's non-farm payrolls report is a bit of a riskbut they say it would take a significant miss to put the forecast in jeopardy.
"We think US labour data would have to slow dramatically to deter a 75bs policy rate hike, requiring surprises well below our lowish 0.3% m/m expectation for average hourly earnings and 275,000 nonfarm payroll growth," Stan Chart writes.
The market has shifted pricing following Powell's Jackson Hole speech. The odds of a 75 bps hike are up to 75% and the terminal top is now 3.95% in March 2023.
