Wall Street forecasts additional Fed hike after hawkish September FOMC

Wall Street is increasingly pricing another Federal Reserve rate hike after the central bank’s September FOMC (Federal Open Market Committee) meeting delivered a more hawkish-than-expected signal. Goldman Sachs, Morgan Stanley, NatWest, Rabobank, Swedbank and Commerzbank have either added a hike to their forecasts or reduced the rate cuts they expect later. The median market view is for one further 25-basis-point increase, although strategists disagree over whether it would come in October or December. Citi, ING and SEB still expect the September increase to have been the final hike of the current tightening cycle. One basis point equals 0.01 percentage point.