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Fed holds at 3.5% to 3.75% but September hike risk remains

Nordea said the Fed vote was 9-3, with three hawkish dissents voting for a 25bp hike at this meeting, while government bond moves and a softer dollar point to some market scepticism about inflation control.

Reported · Written up by our desk · Central Banks

FXStreet reports that Nordea’s Kirsti Sunde Midttun said the Federal Reserve kept its target range unchanged at 3.50% to 3.75%, but the decision was less comfortable than in June because three members dissented in favor of a hike.

With no new projections, the unchanged statement and what Nordea described as a cautious press conference provided limited guidance, and the outlet noted that moves in US government bonds and a weaker US dollar suggest some investors are sceptical about inflation control.

Nordea continues to expect a September hike, after stating that market pricing had put the odds of a hike at about one in three before the meeting.

The note highlighted that the vote was 9-3, with Beth Hammack, Lorie Logan, and Neel Kashkari preferring a 25bp increase at this meeting.

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