TREE NEWS reports: HSBC now expects the Federal Reserve to raise interest rates by 25 basis points in both September and December, reversing its earlier call for rates to stay unchanged. US economist Ryan Wang wrote that after August jobs and CPI data beat HSBC’s forecasts, the bank expects the FOMC to vote for a quarter-point hike at its Sept. 15-16 meeting, lifting the fed funds target range to 3.75%-4%. HSBC sees no rapid pivot to cuts after this year’s hikes.
HSBC Now Expects Two Fed Rate Hikes This Year, Abandoning Hold Call
AI take
A sell-side house flipping from hold to two hikes matters less for the hikes themselves than for the signal: the bar for abandoning a pause call was cleared by incoming data, not by a change in the policy reaction function. For crypto and RWA markets, the notable element is HSBC explicitly ruling out a rapid pivot to cuts, which removes the easing backstop that has repeatedly capped rate-driven drawdowns. Whether other forecasters follow HSBC in repricing the back end of the year is the open question.
Generated by AI for reference only.
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