Macquarie: The Federal Reserve's statement may take a more hawkish tone, with the most likely timing for an interest rate hike being December.

Odaily reports that David Doyle, Head of Economic Research at Macquarie Group, stated that the Federal Reserve will not adjust interest rates at this meeting, but it is the first time this year that decision-making seems somewhat unclear, with market-implied probability of a rate hike around 35%. The wording of Waller and the voting results of committee members will be key. Besides the rate decision itself, the market may also focus on whether any voting members dissent, whether there is a change in the statement’s wording, and how Chair Waller communicates during the press conference.

If rates are kept unchanged, opposing votes are very likely, and the number of dissenting votes will depend on how hawkish the statement’s wording becomes. It is still expected that the next policy action will most likely be a rate hike, with December being the most probable timing. The description of the unemployment rate in this statement may become more optimistic. The wording in June was “little changed”, but subsequent data showed a slight decline in the unemployment rate. Additionally, the risk of further adjustment in the statement’s wording leans in a hawkish direction, with a possible addition indicating a future tightening policy stance. (Golden Ten Data)