Macro · Macro Rapid Response FOMC: Hawkish Shift

Key arguments

• The FOMC hiked 25bp to 3.75-4.00% unanimously, with a more hawkish-than-expected statement that drops supply-shock language and justifies action via a 'timelier' return to 2%.
• The September SEP revises inflation higher and more persistent, pushing 2% convergence to 2029; the median dot implies one more hike in 2026, no cuts in 2027, and easing from 2028.
• The dot plot shows 16 of 18 members expect at least one more hike by year-end, 12 foresee one additional 25bp move and 4 foresee two; none indicate a cut.
• Intesa Sanpaolo expects a second hike to 4.00-4.25% by year-end, most likely in December, and views its own path as less hawkish than market pricing, especially over 12 months.

Corresponding source evidence

1. FOMC: Hawkish Shift The September FOMC meeting concluded, as expected, with a 25-basis-point hike in the federal funds rate target to 3.75 –4.00%, decided unanimously and accompanied by a more hawkish-than-expected message.
2. The statement removes the reference to supply shocks as an explanation for inflation and justifies the tightening with the need for a “timelier” return to 2%, without providing forward guidance on upcoming moves.
3. The new Summary of Economic Projections show inflation that is slightly higher and, above all, more persistent, with a return to the target not expected until 2029, and a rate path consistent with another hike by year-end and rate cuts postponed until 2028 and beyond. · 2029