In the run up to next week’s Federal Reserve policy meeting, the timing of future interest rate hikes is drawing the attention of bond traders and analysts.

While the anticipated tapering of the Fed’s bond purchases this year has dominated much of the discussion so far, it’s the interest-rate outlook from the Fed that is likely to provide new information and may be market-moving.

For the first time, policy makers will be releasing their expectations for where the fed funds rate target will end up in 2024 and some say the market is already underestimating the risk of the Fed delivering a hawkish surprise in the form of more rate hikes than expected over the next three years.

Tuesday’s U.S. inflation report, showing a slowdown last month in the recent price surge, had investors lowering their expectations for how much the Fed is likely to end up raising interest rates, as reflected in overnight index swap rates five years out. But by Wednesday, those moves had largely retraced, with the 5-year, one-year OIS rate hovering around 1.48%, close to where it was at the start of the week.

“We’re not likely to get much new in terms of taper timing from the FOMC next week,” Jonathan Cohn, Credit Suisse’s head of rates trading strategy, said via phone Wednesday. “What we will get is a new dot plot and in that new dot plot is where the intrigue lies.”

His base-case view is that in the central bank’s interest rate forecast, known as the dot plot, the median dot for 2024 will reflect at least three rate hikes, in addition to three hikes in 2023, making a total of six moves through the next three years that would put the benchmark U.S. interest rate around 1.60%.

Credit Suisse’s trading strategy group sees the Fed’s 2024 median dot as “likely to materially exceed current market pricing,” he said, though it may not deliver quite the hawkish jolt to financial markets that came from the Fed’s policy meeting in June.

Back then, officials penciled in two rate rises for 2023 and signaled more willingness to react to higher inflation than previously thought. That hawkish surprise delivered by the Fed in June resulted in a soaring dollar, a selloff in gold futures, and drop in major non-technology stock indexes. The Dow Jones Industrial Average DJIA fell 210.22 points, or 0.6%, that day.

Standard Chartered Bank analysts see the potential for another surprise next week arising from the Fed’s 2022 median dot, which they say will likely signal one hike next year that isn’t yet being fully priced in by markets. The bank also expects the Fed to keep the two hikes that are already penciled in for 2023, while adding two more in 2024 — for a total of five moves equaling 125 basis points.

A hawkish tilt from the Fed again this time around would tend to be “a risk-off event, but whether it’s as big as in June is another question,” said Steve Englander, Standard Chartered’s head of global G10 FX research and North America macro strategy.

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