Fed to hike by 75bps again on november 2, should pause when inflation halves

Reuters states that the US Federal Reserve will go for its fourth consecutive 75 basis point interest rate hike on Nov. 2. The poll said the central bank should not pause until inflation falls to around half its current level.

''Its most aggressive tightening cycle in decades has brought with it ever bigger recession risks. The survey also showed a median 65% probability of one within a year, up from 45%.

Still, a strong majority of economists, 86 of 90, predicted policymakers would hike the federal funds rate by three-quarters of a percentage point to 3.75%-4.00% next week as inflation remains high and unemployment is near pre-pandemic lows.

Results in the poll are in line with interest rate futures pricing. Only four respondents predicted a 50 basis point move.''

US dollar update

The US dollar is in a bullish trend while within the bull flag and front side of the trendine. However, if the bears take over, a break of support willlikely seal the deal for risk assets.