CITIC Securities: Still Expects the Fed to Raise Rates by Another 25bp in December

Odaily reports: According to a CITIC Securities research note, the Federal Reserve held rates steady in October as expected, with statement language more optimistic about the pace of economic expansion and more cautious in its guidance on the policy stance. Warsh's post-meeting remarks were more moderate than in September, mentioning that credit conditions have tightened and inflation expectations have moved in the right direction, and also previewing adjustments to the FOMC meeting schedule for next year and the year after. We still expect the Fed to raise rates by another 25bps in December, and the terminal rate of this hiking cycle may not be far from current levels. The new variables in the Middle East situation are not yet sufficient to provide a clear and long-lasting exit path for both the US and Iran, and high oil prices may persist before the situation becomes clear; further improvement in dollar liquidity needs new catalysts. (Jinshi)