With many Fed officials now either explicitly supporting, or at least “open to”, an interest rate hike in March, we would expect to see some acknowledgement of that in the statement issued after the upcoming January FOMC meeting next week or, at the very least, when the minutes are released three weeks later. Overall, we expect four 25bp rate hikes this year and, since core inflation is likely to remain well above the 2% target, an additional four rate hikes next year, which would take the fed funds target range to between 2.00% and 2.25% by end-2023.
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