• Almost every market participant expects the Committee to hike rates for the second time in a decade.
• Bearing in mind that a hike is almost fully priced in, we don’t expect a major market reaction in case the Fed acts as expected. We believe that the focus will quickly turn to the updated “dot plot”, the new economic forecasts, and Chair Yellen’s press conference after the rate decision.
• Accelerating inflation due to Trump’s anticipated policies could cause the Fed to tighten policy faster, and that’s why we believe that the “dot plot” will take center stage at this meeting.
• The market is currently anticipating 1.6 interest rate increases in 2017, and another 1.8 hikes in 2018.
• In our view, the Fed has to deliver something much more than this in order to refuel the USD rally.

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