December's FOMC Meeting: Beware of SEP Dots And Term Premia
With geopolitical events in the driving seat, and a 25bps-rate increase fully priced in, the December FOMC meeting risks falling off the market’s radar screen. But that would be a mistake.
The rate action itself cannot be taken for granted, any turbulence in financial markets could force the Fed to once again postpone any hike (as of today, only a risk event).
More importantly, the Fed needs to update its SEP dots and communicate how it intends to proceed with its policy normalisation program; two massive communication challenges.