Among the many consensus expectations from Yellen tomorrow is that the Chairwoman – while hiking rates by 25 bps – will cushion the announcement in extensive language explaining why this is the most dovish rate hike in history, a message which will likely be conveyed by a decline in slope of the Fed’s “dots”, suggesting fewer hikes over the next year.
However, that is a problem and as Deutsche Bank explains there is really no such thing as a “dovish rate hike.” Here is DB’s Dominic Konstam:
The Fed is “right”