Macquarie Strategist Sees December Fed Rate Hike Possibility

Thierry Wizman, global FX and rates strategist at Macquarie, has indicated that a Federal Reserve interest rate hike in December is a possibility. Wizman's assessment is based on the Federal Reserve's typical practice of implementing significant policy changes, including rate adjustments, in conjunction with the release of its Summary of Economic Projections (SEP) and the accompanying "dot plot." The "dot plot" illustrates the Federal Open Market Committee (FOMC) members' individual projections for the future path of the federal funds rate. Wizman stated in an interview with Bloomberg that "December doesn't look like the wrong time to do it," referring to a potential rate increase. He elaborated that the release of the new SEP, which provides updated economic forecasts from Fed officials, often serves as a catalyst for the central bank to enact substantial policy shifts. This strategic timing allows the Fed to align its monetary policy decisions with its latest outlook on inflation, employment, and economic growth, and to communicate these changes effectively to the market. The Federal Reserve has been closely monitoring inflation data and labor market conditions as it calibrates its monetary policy. While the Fed has paused its rate-hiking cycle in recent meetings, the possibility of further tightening remains on the table if inflation proves more persistent than anticipated or if the economy continues to show robust growth that could reignite inflationary pressures. Wizman's comments suggest that market participants should remain attentive to the economic data released in the coming months, as well as the Fed's communications, particularly around the December FOMC meeting. The potential for a December rate hike, should it occur, would signal the Fed's continued commitment to its inflation-fighting mandate, even as it navigates a complex economic landscape. Macquarie is a global financial services group offering advisory, risk management, and capital solutions. The Federal Reserve is the central banking system of the United States, responsible for conducting monetary policy, supervising and regulating financial institutions, and maintaining financial stability. The Summary of Economic Projections (SEP) is a quarterly publication by the Federal Reserve that includes forecasts for key economic variables and the FOMC's projections for the federal funds rate. The "dot plot" is a component of the SEP that visually represents each FOMC member's individual projection for the appropriate level of the federal funds rate at the end of each year and over the longer run.