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Higher for longer

There appears to be enough support on the FOMC for a pause at next week’s meeting, but the statement and new projections will make clear that this is not the end of the hiking cycle. We now expect rates to be raised again at the July meeting. And although we still think that falling inflation and weak GDP growth will convince the Fed to move to the side-lines soon, it is now likely to take until early next year for officials to be ready to start cutting again.

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