US Economic Weekly: Hawk take

The FOMC delivered a unanimous hike, in line with our expectation. The 2026 dot moved up to signal another hike and the distribution pointed to broad support for further tightening. We continue to expect another 25bp hike in December. The broader message was hawkish. Economic growth and inflation projections were revised higher, while Chair Warsh argued financial conditions were not restrictive and characterized the hike as removing "a dose of accommodation." Growth remains robust, and we have raised our Q3 GDP tracking estimate to 4.0% q-o-q ar from 3.3% last week. Real retail sales accelerated in August, and we expect business capex also remained solid. We maintain our call for a 25bp hike in December, followed by a prolonged hold in 2027, with risks tilted to the hawkish side.