Thursday, 17 September, 2026
FOMC – Mkt Views
Broadly hawkish across the board. The vote was unanimous and the dot plot showed 16 of 18 members expecting at least one more hike this year, pushing most banks to revise their calls more hawkish.
One more hike expected (4 banks):
- JPM — sees one more hike in December, in line with the median dot.
- GS — revised from “September was the only hike” to expecting a second 25bp hike in October (not December), given the tone around a “timelier return” to target. Terminal rate unchanged at 3.25-3.5%, but they’ve now added a third cut in March 2028.
- Nomura — one more hike in December, then a long hold through 2027, though they flag risks are tilted hawkish.
- Wells Fargo — leaning toward a second hike, with “one and done” still possible only if inflation data softens sharply; a third hike is “firmly on the table” but anything beyond that seems unjustified given labor-market balance.
Two more hikes expected (4 banks):
- TD — total of 75bp more tightening between now and Q1 2027; favours curve steepeners.
- MS — sees more hikes than previously expected; recommends flattener trades and staying long USD/JPY.
- DB — 50bp more (December + March), unwinding last year’s “insurance” cuts; flags two-sided risk (could hike sooner in October, or pause if conditions tighten/data softens).
- RBC — two more hikes in 2026, fully reversing 2025’s insurance cuts, though they caution the impact could fall hardest on lower/middle-income consumers.
Most hawkish (1 bank):
- Mizuho — three hikes cumulatively over the next couple of quarters, with risk of front-loading.
Outlier — dovish/one-off camp:
- ING — thinks this could be a one-off despite their own forecast table showing another hike, pointing to weak underlying payroll trends (31k average monthly gains since Jan 2025 vs. the 162k August print) and a falling participation rate as reasons the Fed may not need to keep going.
